Contemporary Labor Economics
11th Edition
ISBN: 9781259290602
Author: Campbell R. McConnell, Stanley L. Brue, David Macpherson
Publisher: McGraw-Hill Education
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Question
Chapter 2, Problem 14QS
To determine
The impact of change in social security law on labor supply.
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The below graph shows the optimal asking wage. Suppose another individual with the same wage opportunities is more “present-oriented”. Show how this would alter the graph. How will this affect the asking wage and the length of the job search?
Why does a worker allocate his or her time over the life cycle so as to work more hours in those periods when the wage is highest? Why does the worker not experience an income effect during those periods?
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?
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Contemporary Labor Economics
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- Suppose Georgette earns $13 an hour installing transistorized digital chips in electronic calculators. If you were unemployed, would you offer to work for $8 an hour to get the job? Why might a profit-maximizing employer turn down your generous offer?arrow_forwardWhat does the term "family wage economy" mean based on Ruiz's chapter "The Flapper and the Chaperone"? (Only ONE answer is correct.) A. It means that the economic survival of the family was based on all of the wages multiple family members earned; it was not just based on the husband or father's job. B. It means that families worked together for the same company and employers gave the entire family one paycheck; people were not paid individually. C. It means that the federal and state governments only imposed income taxes on the head of the household, not on wives or dependent children. D. It means that families did not expect their teenage children to work; teenagers were expected to enjoy leisure time as often as possible.arrow_forwardHow does Increase or decrease in wage affect hours of work.arrow_forward
- How does the amount of unemployment created by an increase in the minimum wage depend on the elasticity of labor demand? Do you think an increase in the minimum wage will have a greater unemployment effect in the fast-food industry or in the lawn-care/landscaping industry?arrow_forwardWhy did the labor force participation rate of women increase so much in the past century?arrow_forwardHow does age impact on job mobility? Explain in shortarrow_forward
- The below graph shows the optimal asking wage. Suppose another individual with the same wage opportunities is more “future-oriented”. Adjust the graph to show the impact this will have on the asking wage and the length of his job search:arrow_forwardWhen focusing on a married couple, one person’s non-labor income includes the laborearnings of his/her partner. Using a graph of budget constraints and indifference curves,describe what would happen to the labor supply of one spouse if the other experiences aninvoluntary job loss. Your answer does not depend on whether the spouse you’regraphing is initially supplying labor or not.arrow_forwardIn California, a welfare recipient can earn $225 per month without having her benefits reduced. Beyond $225, benefits are reduced by 50 cents for every dollar of earnings. Consider Elizabeth, a resident of California, who can earn $10 per hour. If she does not work at all, she is eligible for welfare benefits of $645. a. If she works 10 hours, how much are her earnings, how much is her welfare benefit, and how much is her income? b. After Elizabeth works a certain number of hours, she does not receive any benefit at all. What is that number of hours? c. Use your answer to parts a and b to plot her budget constraint. d. Sketch a set of indifference curves consis- tent with Elizabeth's participating in the labor market.arrow_forward
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