LABOR ECONOMICS (LL+ACCESS)
8th Edition
ISBN: 9781264909339
Author: BORJAS
Publisher: MCG
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Chapter 7, Problem 3P
To determine
Explanation for the given wage pattern.
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Give three reasons a worker’s wage might be above the level that balances supply and demand.
To what extent are flexible work arrangements a positive for workers? For employers?
Think of a job that either you or a friend/relative held that paid a wage that you thought was either unfair or inequitable compared to the wages or salaries of other positions within the business or within the wider business community. Answer the following questions in relation to that example.
On what basis do you think the wage was set? I.e. What factors influenced how much the organization valued the role?
Why did you think it was unfair?
If there was an opportunity to be covered by a Union contract/agreement, do you think there would have been an increase/decrease in the wage?
If you were the employer, what would cause you to increase the wage for that role?
and finally,
5. Do you think that the wages/salaries of the main "jobs" in our society are allocated fairly? Provide an example of a role that you think is highly undervalued and explain why.
For example, should CEOs and celebrities earn millions of dollars each year compared to child care workers or stay at home parents who…
Chapter 7 Solutions
LABOR ECONOMICS (LL+ACCESS)
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- The below graph shows the optimal asking wage. Suppose another individual with the same wage opportunities is more “future-oriented”. Show how this would alter the graph. How will this affect the asking wage and the length of the job search?arrow_forwardBrad Edwards is earning $36,000 a year in a city located in the Midwest. He is interviewing for a position in a city with a cost of living 18 percent higher than where he currently lives. What is the minimum salary Brad would need at his new job to maintain the same standard of living?arrow_forwardBelow are three examples of an individual experiencing a wage change at various points in their career: i) After five years of working with their current employer, the individual received a scheduled increase in their hourly wage. ii) In celebration of the firm's 50th anniversary, the individual's employer increased the hourly wage of all employees for the month of February. iii) After a particularly profitable year, the individual's employer increased the hourly wage of all employees. Assume that each wage change generated the same sized substitution effect. Which of the three wage changes do we expect will least motivate the individual to increase their hours worked? Explain.arrow_forward
- According to a 2016 article in the Wall Street Journal, “After years of relative equilibrium, the job market for nurses is heating up in many markets, driving up wages and sign-on bonuses for the nation’s fifth-largest occupation.” Many nurses who previously delayed their retirement due to the 2008 recession had begun to retire, resulting in a retirement wave that caused nurses to exit the workforce in greater numbers than new nurses were entering. At the same time, demand for nurses had increased due to the additional health care coverage associated with job growth over the previous decade since the recession and the Affordable Care Act. Draw a demand and supply graph illustrating these developments in the market for nurses. Based on your diagram, forecast what will happen to the equilibrium wage for nurses as a result of the shift(s)? Is this consistent with what we actually observed? Briefly discuss whether this problem provides enough information to determine whether the…arrow_forwardSupply: Thinking Like a Seller - End of Chapter Problem Jerome is working as an IT consultant. His individual labor supply curve is given in the accompanying graph. Jerome decides to enroll in college and will begin taking classes next semester. Make the appropriate change to the graph to show the most likely effect on Jerome's labor supply curve of his decision to attend college. If Jerome's decision to attend college results in a change in supply, shift the supply curve appropriately, but leave the wage line unchanged. If Jerome's decision to attend college results in a change in quantity supplied, adjust the wage line appropriately, but leave the supply curve unchanged. Wage Jerome's individual labor supply curve Wage Quantity Supplyarrow_forwardWhy do efficiency wages generate involuntary unemployment? What factors prevent the market from clearing in efficiency wage models?arrow_forward
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