Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 26, Problem 11CQ
To determine
Differences in the wage earnings of workers.
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Three coworkers work for the same employer. Their jobs are warehouse manager, office manager, and truck driver. The
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Chapter 26 Solutions
Economics: Private and Public Choice (MindTap Course List)
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- Suppose that the condition in part (a) holds and wages adjust to equilibrate labor supply and labor demand. Calculate the wage and employment in each sector. What is the a) Equilibrium wage? b) Emplyment in the Manufacturing sector c) Employment in the Service Sector?arrow_forwardShow that the competitive labor market compensates workers for the probability that they will be laid off.arrow_forwardtrue or false? Non-monetary aspects to a job can explain why wages may differ given that two workers have the same talents, abilities, and investment in human capital.arrow_forward
- (Based on Chapter 2, Problem 1 of Benjamin et al., 2031) Amit has $2000 of annual non-labour income. He has 80 hours per week that he can allocate between labour and leisure, for 80 x 52 = 4160 hours per year. His current wage rate is $20 per hour and he chooses to work 2200 hours a year. (a) Draw a leisure - labour diagram, clearly indicating Amit's current labour supply decision. (Your diagram should be clearly labeled and include Amit's budget line and an indifferent curve showing his leisure and consumption of goods and services at his optimal choice. Use the figures provided to find the y-intercept and his consumption if he doesn't work.) (b) Amit's wage rate increases to $25 per hour. In response, he increases his labour supply to 2300 hours. If he were "compensated" accordingly, at this new wage rate he would be just indifferent to working 2200 hours at his original wage rate and working 2400 hours at the new wage. Illustrate Amit's new optimal choice. Use the information…arrow_forwardTRUE OR FALSE. When the wage rate increases by 20% & the quantity supplied of labor increases by 5%, then this type of labor is considered wage inelastic.arrow_forwardWhen would you see the greatest gain if there is a compensating differential built into your salary? The differential is for a negative risk that you care about more than most people do. The differential is for a large negative risk that you don't care about as much as most people do. The differential is for a positive job aspect that you don't care about as much as most people do. The differential is for a slightly positive job aspect that you care about more than most people do.arrow_forward
- A carpenter quits his job at a furniture factory to open his own cabinetmaking business. In his first two years of operation, his sales average $100 000 per year and his operating costs for wood, workshop and tool rental, utilities, and miscellaneous expenses average $70 000 per year. Now his old job at the furniture factory is again available. What is the lowest wage at which he should decide to return to his old job? Why?arrow_forwardThe 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_forwardHow does age impact on job mobility? Explain in shortarrow_forward
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