LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 7, Problem 2P
a)
To determine
The effect of indexing the minimum wage to inflation on wage inequality.
b)
To determine
The effect of increasing the benefit level paid to welfare recipient on wage inequality.
c)
To determine
The effect of increasing wage subsidies paid to firms that hire low-skilled workers on wage inequality.
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Students have asked these similar questions
Suppose the government introduced a child benefit equal to $7000 per year. For every dollar earned by the family, the benefit amount is reduced by 7
cents. At what level of earnings will the family no longer receive a child benefit?
Which of the following are true regarding the
measurement of poverty?
The poverty rate is the percentage of households
whose earnings fall below the poverty line.
The measurement of the poverty rate takes into
account the effect of in-kind transfers.
The measurement of the poverty rate does not take
into account whether a households loss of income is
transitory or permanent.
The poverty line is an income amount below which
a family is deemed to be poor.
Poverty is measured by the number of people who fall below a certain level of income—called the poverty line—that defines the income one needs for a basic standard of living. The official definition of the poverty line traces back to
Group of answer choices
A)The Great Depression
B)Mollie Orshansky, whose idea was to define a poverty line based on the cost of a healthy diet.
C)1953 and the ability to pay for housing and food.
D)The 1965 cost of providing food, housing, and transportation.
Knowledge Booster
Similar questions
- Which one of the following is the most likely to be associated with an increase in the incidence of poverty? A) The Gini coefficient falls substantially. B) The number of single persons with children and of single pensioners has increased substantially. C) The real income of those in the top 20% of income earners falls by 10%. D) The number of people earning below the level of income support has decreased.arrow_forwardIn California, a welfare recipient is eligible for welfare benefits of $645. Benefits are reduced by 50 cents for every dollar of earnings. Consider Elizabeth, a resident of California, who can earn $10 per hour. 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 consistent with Elizabeth's participating in the labor marketarrow_forwardWhich of the following does not explain the rise in income inequality in the United States during the past four decades? An increase in minimum wages. Increased international trade with low-wage countries. Changes in technology. All of these answers have contributed to the rise in income inequality. A reduction in the demand for unskilled labor.arrow_forward
- What effect will each of the following proposed changes have on wage inequality?a. Indexing t he m inimum wage to inflation.b. Increasing the benefit level paid to welfare recipients.c. Increasing wage subsidies paid to firms that hire low-skill workers.d. An increase in border enforcement, reducing the number of illegal immigrants entering the country.arrow_forwardWhat is the poverty trap? Group of answer choices A)The situation where government assistance can result in a low or zero net gain for working. B)The situation where a person becomes unemployed and cannot find another job. C)The situation where a person becomes disabled and cannot work. D)The poverty trap occurs when a person is poor, and structural discrimination prevents that person from escaping poverty.arrow_forwardWhat factors contribute to wage inequality in the labor market?arrow_forward
- Which of the following policies would be the most likely to have the effect of increasing income inequality. a) increasing the interest rate on bank loans b) switching from a regressive system to a progressive tax system. C) lowering taxes on income from interest earned on investment d) Increasing the nations per capita income e) Taking inheritance and using the revenue to provide college scholarshiparrow_forwardWhich of the following is most likely to accept a large wage demand? A. An international airline company. B. A construction company. C. A lone food store in a remote community. D. A steel plant.arrow_forwardIncomes for both low-income and high-income workers go up. However, the increase is higher for high- income workers. Which of the following will happen? Question 23 options: Poverty will fall and inequality will rise. Poverty will rise and inequality will rise. Poverty will fall and inequality will fall. Poverty will rise and inequality will rise.arrow_forward
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