LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Chapter 12, Problem 8P
To determine
Explain the UI benefits for 26 weeks for overall
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As part of your job as an economist at the Department of Work and Pension, you regularly advise ministers on various economic and social
policies that the government plans to introduce. The government is considering a welfare policy to help people to get out of poverty while at the
same time reducing the incidence of "out of work" in the population. The ministers are considering whether to (1) give people a cash grant or (2)
an earned income tax credit, which pays those in work 30% of the hourly wage they receive from their employer.
Discuss the merit of each policy and their implications for labour supply. Make use to illustrate your answer with the use of diagram(s) and to
make reference the existing empirical evidence (i.e., from existing studies).
Peter lives for three periods. He is currently considering three alternative educationwork options. He can start working immediately, earning $100,000 in period 1, $110,000 in period 2 (as his work experience leads to higher productivity), and $90,000 in period 3 (as his skills become obsolete and his physical abilities deteriorate). Alternatively, he can spend $50,000 to attend college in period 1 and then earn $180,000 in periods 2 and 3. Finally, he can receive a doctorate degree in period 2 after completing his college education in period 1. This last option will cost him nothing when he is attending graduate school in the second period as his expenses on tuition and books will be covered by a research assistantship. After receiving his doctorate, he will become a professor in a business school and earn $400,000 in period 3. Peter’s discount rate is 20 percent per period. What education path maximizes Peter’s net present value of his lifetime earnings?
Ali is a member of a family that consists of him, his father, his mother and his older brother. Each member of the family has his own
mobile phone. Each mobile phone is on a post-paid plan, for which a monthly bill is received at the end of each month. The electricity,
on the other hand, is provided to the entire house in general, with one bill is received at the end of each month. The father has recently
received the phone bill of Ali and wishes to do some analysis of the phone consumption. Assuming that the value of the phone bill is
calculated based on the number of minutes consumed with no subscription fees. In the above information, the cost of the phone bill to
Ali is:
a.
An indirect fixed cost
O b. An indirect, variable cost
C.
An indirect mixed cost
d. A direct fixed cost
A direct, variable cost
O e.
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