PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 4RQ
To determine
Factors affecting wage inequality.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Suppose there are two identical job offers in the same competitive labor market for a software developer position. Both offers have the same salary of $80,000 per year. However, Job A allows the employee to work from home, while Job B requires the employee to commute to the office daily. The average monthly commuting cost for Job B is estimated to be $400.
Calculate the compensating differential in this scenario, and determine if it makes economic sense for the employee to choose Job B over Job A.
Assume a working year consists of 12 months.
Suppose that the government introduces a welfare program in which any individual with an income of less than $42,350 per year receives a lump-sum transfer payment of $2,000 from the government. Assume that, in the short run, there is no change in labor-supply behavior among the people in Perkopia.
In the year 2007, the poverty rate after the introduction of the welfare program in Perkopia is
Suppose initially that immigrant labor and native-born labor are complementary resources. Explain how a substantial immigration might change the demand for native-born workers, altering their wages. (Review the relevant portion of Chapter 12 if necessary to help answer this question.) Next, suppose that new immigrant labor and previous immigrant labor (not native-born) are substitute resources. Explain how a substantial immigration of new workers might affect the demand for previous immigrants, altering their wages.
Chapter 8 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
Knowledge Booster
Similar questions
- Suppose the labor market is segmented into two distinct markets: the market for low-skill workers and the market for high-skill workers. Furthermore, suppose the competitive equilibrium wage in the low-skill market is $7.00/hour, while the competitive equilibrium wage in the high-skill market is $20.00/hour. If the minimum wage is set at $10.00/hour, which market will exhibit the greatest amount of unemployment? Demonstrate it graphically.arrow_forwardQ49 In order to maximize profits, a firm needs to determine the quantity of each factor that it will employ, which is dictated by price as well as productivity of the factor. Assume farmer in the Ottawa area named Justin Trudeau has fixed amounts of land and capital finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired. The farmer's product sells for $3 per unit, and the wage rate is $13 per worker. The marginal revenue product of the second worker is Multiple Choice $9 $15 $24 $8 $14.arrow_forwardConsider the following economy. In year 1, there are 40 identical homes occupied by the residents. Ten out of 40 homes are rented, and the remaining 30 are owner-occupied. The annual rent for each home is K dollars (where K stands for thousand). In the same year, 10 additional homes are built, however, they are not sold or occupied, in the country. The price of a newly constructed home in Year 1 is 50K dollars. In Year 2, there is a total of 50 occupied homes in the country of which 20 is rented and the remaining 30 is owner-occupied. The rent on a rental home decreases by 20% to 0.8K dollars. In year 2, there is no new construction. In year 3, there is a fire that destroys 5 owner-occupied homes so that only 45 homes are occupied. The annual rent increases back to K dollars per home. There is no new construction in Year 3. However, the government puts a big tent to shelter those who lost their homes in fire. In total, the government spends 2K dollars for this emergency housing of 5…arrow_forward
- What is the combined rent, interest, and profit share of the income earned by Americans in a typical year if proprietors’ income is included within the labor (wage) share?arrow_forwardF (L, K) = L0.2K0.7, The wage rate (price per unit of labour) is w = 2 and the capital rental rate (price per unit of capital) is r = 7. Derive the equation of the isoquant for y = 2 (with K in the vertical axis and L in the horizontal axis). Use the first and second derivative to show that this curve is decreasing and convex. Provide a graphical representation of the isoquant indicating at least one combination of labour and capital in this curve.arrow_forwardHimig has two part-time jobs, as an assistant worker in a fast food chain (Job 1) and and as a receptionist at a small hotel (Job 2). Due to her heavy load in her studies, Himig can only render 12 hours a week in her jobs. She has determined that for every hour she works at Job 1, she needs 2 hours of preparation time, and for every hour she works at Job II, she needs one hour of preparation time, and she cannot spend more than 16 hours for preparation. If Himig makes Php 40 an hour at Job 1, and Php30 an hour at Job 2, how many hours should she work per week at each job to maximize her income? (Let x = Job 1; y = Job 2).arrow_forward
- When hiring additional workers, a firm operating in a perfectly competitive labor market will have to offer higher wages to hire additional workers, and the old workers will also receive the new, higher wage. be able to hire additional workers at lower wages because the new workers have been unemployed. be able to hire additional workers without offering higher wages. have to offer higher wages to hire additional workers, but the old workers do not get the higher wage.arrow_forwardA worker receives CAD 3,000 of lump-sum transfers from the government annually andhas 4,160 available hours per year. She is currently working 2,200 hours per year at the wage rateof CAD 20.00 per hour. After being promoted, her wage rate increases to CAD 25.00 per hour,and she decides to work 2,700 hours. She is indifferent between her original work decision andworking 2,850 hours at CAD 25.00 per hour.1. What is the compensated wage elasticity of labor supply implied by her response to thewage increase? Is the compensated labor supply elastic or inelastic?2. What is the uncompensated wage elasticity of labor supply implied by her response to thewage increase? Is the uncompensated labour supply elastic or inelastic?3. Why are these elasticities different?arrow_forwardSeventy-two percent of the members of the United Food and Commercial Workers Local 655 voted to strike against Stop ’n Shop in the St. Louis area. In fear of similar union responses, two of Stop ’n Shop’s larger rivals in the St. Louis market—Dierberg’s and Schnuck’s—decided to lock out its union employees. The actions of these supermarkets, not surprisingly, caused Local 655 union members to picket and boycott each of the supermarkets’ locations. While the manager of Mid Towne IGA—one of many smaller competing grocers—viewed the strike as unfortunate for both sides, he was quick to point out that the strike provided an opportunity for his store to increase market share. To take advantage of the strike, the manager of Mid Towne IGA increased newspaper advertising by pointing out that Mid Towne employed Local 655 union members and that it operated under a different contract than “other” grocers in the area.What is the expected impact of advertising on Mid Towne IGA (how will the…arrow_forward
- Suppose the demand for the Vietnamese inexpensive products from many countries over the world have increased by about 15 percent even under the Coronavirus pandemic in 2020 (from January through August). Suppose further that the demand for Vietnamese skilled workers by the Vietnamese companies producing new high-tech and advanced products have decreased by about 10 percent in 2020 compared to those in 2019. What has happened to the wage gap between Vietnamese skilled and unskilled workers in 2020? Which of the following is MOST appropriate for an answer? A. The wage gap is most likely to fall. B. It is hard to predict unambiguously how the wage gap changes given above information. C. The wage gap is most likely to rise. D. The wage gap is most likely to be little changed. Perhaps b and c weren't the answer. Please let me know why the answer you chose is correct.arrow_forwardSeventy-two percent of the members of the United Food and Commercial Workers Local 655 voted to strike against Stop ’n Shop in the St. Louis area. In fear of similar union responses, two of Stop ’n Shop’s larger rivals in the St. Louis market—Dierberg’s and Schnuck’s—decided to lock out their union employees. The actions of these supermarkets, not surprisingly, caused Local 655 union members to picket and boycott each of the supermarkets’ locations. While the manager of Mid Towne IGA—one of many smaller competing grocers—viewed the strike as unfortunate for both sides, he was quick to point out that the strike provided an opportunity for his store to increase market share. To take advantage of the strike, the manager of Mid Towne IGA increased newspaper advertising by pointing out that Mid Towne employed Local 655 union members and that it operated under a different contract than “other” grocers in the area. Use a graph to describe the expected impact of advertising on Mid Towne IGA…arrow_forwardIn 2006, Evo Morales assumed the presidency in Bolivia, a South American country in which official commerce is done in Spanish. Morales was the first Bolivian president of indigenous decent. As president, he quickly instituted reforms that were designed to reduce discrimination against indigenous populations with the aim of eventually reducing inequality. Suppose discrimination before Morales took two forms: discrimination in education by not providing state funds to educate all children (and particularly not educating indigenous children in Spanish) and discrimination in the job market by firms not willing to hire indigenous workers.a. In terms of education, which policy do you think would be more successful at combating discrimination and inequality: (1) providing state funds to educate all people exclusively in their native languages or (2) providing state funds for a public education system that requires all people to learn Spanish, as well as a second, indigenous language? Why?b.…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education