Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 25, Problem 3DQ
To determine
Lifetime earnings gain from migration.
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Students have asked these similar questions
Consider an individual who was employed prior to
having a child. Now, they face daycare costs (M) if
they choose to go back to work. Assume that they
earn an hourly wage (W) and their non-labour income
(YN) is greater than their daycare costs (YN > M).
Despite the daycare costs, this individual chooses to
work T-Lo hours per week.
Draw a graph that reflects this individual's income-
leisure constraint (both with and without daycare
costs), utility-maximizing indifference curve (Uo) and
choice of leisure hours (Lo).
Question 14
Human capital is H-e0.07*5), where S is the number of years of schooling. What is the ratio of the productivities of the persons having 9 and 12 years
of schooling, respectively. Hint: This will be the ratio of their wages in the competitive labor ratio of their wages in the competitive labor market.
O 0.81
0.95
O 1.03
O 1.54
7. LO 2, 4 Suppose that a consumer can earn a
higher wage rate for working overtime. That is,
for the first q hours the consumer works, he or
she receives a real wage rate of w, and for hours
worked more than q he or she receives w, where
W2>W1. Suppose that the consumer pays no
taxes and receives no nonwage income, and he or
she is free to choose hours of work.
(a) Draw the consumer's budget constraint, and
show his or her optimal choice of consump-
tion and leisure
(b) Show that the consumer would never work
hours, or anything very close to q
Explain the intuition behind this.
(c) Determine what
hours.
happens if the overtime
wage rate w2 increases. Explain your results
in terms of income and substitution effects.
You must consider the case of a worker who
initially works overtime, and a worker who
initially does not work overtime.
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