Questions and Problems
Check Your Understanding
Question
9nO6exr+J86jtDVLr1TvZVITBQZxFnvyWAfYwWAum7lg3IEMOjc9vCcGMW44BOqoJWkuUfHLsXBJjo2xnr/zUh4+yNdLZqbph3AdL0z9Wa9Y8t52KHvLMqve0n+/TyyiUmQCpWAtAQCg0dLnpvkUVESvF/HMKbAD2yNIuUv0PVhesSQsZK2IryXw0xQ6Goyn1UClwZAmuVuRggN2Prob 11 1. Why are individual supply curves of labor potentially backward bending, but market and industry supply curves are always positively sloped?Question
M4dpWad/qddINWpa/R6EGNIaeRH8s1RNarqI66qaMjMkKrMkZ9lvJsH910UkZqlFBa89NdxkDJli/SpbhxJ0Ig==Prob 11 2. What factors will increase the demand for labor?Question
f2ds2SrHMytk0RbuZFfZX/K/trSgoleHBN/dLcLIKoVAVGGbr9WbatNniW9bcMS1QGzEitK3b2qUjxEzytgis5Pviyk7NdeGSM0TbsdQzo0UzL6w5kOWLuHs8PxNWTBQfFpqOOyIQdVcUS9TvrYMwPBnnRl40ZeiLlue1AbmFFbC2cF1lDnIFfHBg8wmisLMq/83ls9MmstN4CEDBCadvNx0cD/SZzWQProb 11 3. When there is discrimination in the labor market, who loses? Why? Why is it harder to discriminate when both labor and product markets are competitive?Question
9vY8w1UV2/bzF7D9VrSz1XBuC3SxDeM/28xQ0CLe0vjxW7uwzyLontPfoS5hg75scR3zdJpkL0npG8vKQrKc6RpEA4bu7P/LgaWiWFk3PxAbpsxOMv3B3N70V8/qWsuEAM1clI5c9VG+mdT1+j8h9CaY0mIXc2y97Zu4HZsFVH+ddnAVfcdnAHMgGgtMbs7VProb 11 4. What are the important laws in place in the United States to prevent discrimination in the workplace based on race or gender?Question
dVtJJ9SMpa+EG30kN1mPgp7aVMu+B/ocioJ2dw8P646v5qVCGK9jSWMlZe3s16zAK7S7w7kQjFEY5BB7Kn4UOAZbcDiA9T4dProb 11 5. How do unions exert their influence in the labor market?Question
S4wJQ4UZganqGCR+3t/6m1G6uvqfJbTJzCycjY6/yrBhn3Jca53QKglBDU61LFs4NiZ6gvhMZ5nXb2De4/U4gLrVGCqzaTJxvLWI/0GBwg3WXlg6bJzOmCLLKwS20MxfQj9L0SYNWGB9JFFRYUFcNN8Ib61UpDbP902+wFU9EaMy/g6/e1aLGPktnJJCNIwsWAf+MawrLwLRr2v6iGClMAZBScF/GUqqProb 11 6. What are some changes in the types of jobs available in the United States over the past 50 years and what are some trends for future labor employment?
Apply the Concepts
Question
sHrOhHtNZqzAF86orwqSe/jCbmmVRGwPyUvKgW1+upOGAToqpfhn0ishfFaProSqe4xA0gaCIG9DJ0LFrwW7y/pZvU1AGuSZtPOYM25N9m1PQ0dJkr+dbraurtfw0EtgRK6b+sSWOPUxuEvTiYxXAWvMoKUrC5aNnUcq7Hn56CUagCNCgsOaBKO/CBxNLTfwzs6tKP4zAXCuBeJQ7LbS5Nb5D1h0AKGrjylZJFN5MBLXV4MOat8cOBrKT0AqHZuLMKSdLe+ZYH4MSpQWpUihuxpd51rCzO7xfgEbDQeYEQJCFSP7NkcodWyHtyFo/aR7hJPJEIhxMKnTsW9MxA6AomYPYN7+dSnDmn6tJaVK4s5QrWyRy553CLkSpF0sGx6izPq1iMEVXtVGig4IoT0Il9SkUvoJNAb4zP8BJdJPxnMp18UZpnDEC4PDFrSLdKqyYfAY0zyO1HuinVpW5cHVj/xfJlydaIaaSv1mIxMqcLp9kSZGmzodKeaedKf3k2EIqo/6sCxP2ZmFHKhZ2zYo4xXYvB604+8aaIQIrueC/TBDdnF5lFVkqisK/RcGLJD6jPm848YMxUjrwmxt23n/FcrtEFpLyH6GRZWGoyhU59aYPMoDdYkwj0/5EP3iv6rOIggc9JKY6OOHyJ4vhgZA44gsK0CJXQsugNLsKshsA7XXKc6PiVpYf4OlEum1HsQQqvAO/itMLavHx1j0E70HwUCsAk3nPPzlrhGvHAFFcLev0D+YpHI2djMxn1MWP+/aJOj8u28YBUs=Prob 11 7. Some employees feel locked into their jobs because employer benefits, such as health insurance, are not transferrable to other companies. This “job lock” phenomenon is especially severe with health insurance coverage for employees if someone in their family has a severe pre-existing condition that prevents them from getting private health insurance at reasonable rates. What are the effects of this type of inflexibility on labor markets? What would be the impact if some form of health care reform eliminated the potential loss of health insurance for workers?Question
86L5Fp3PZENFjmwBDUNrvZ3lP3ORv/JHi+S1EvN0M85fAzFK/iDUK/M/zT15ctr1M0+xFfOTFTXE5wZuQLCmsIx+4S9VoNJeoBkJZoO7hWqWt8Qj1jIvvtDUpihsjRWZhC+/1jpaj7lz4zyIOFYv6TkbqZPipyE1/c3gTCeVv7x7RKZQ8rM8e5Ju908L6aDMeAkt6z0YT3MvO1Q8ox7hbYMKOfS4a+jFHkli38qEDNla/piZRSRubErVDir/vlaByg4h9mqA+1MAFH0y/UDET7moEb1VrBC0Glvvtp1nksWAxvFJBHWU6X8sYidKeXP8772sFRNxXpYIld0LLPdwSmehe4Tu1bjC4/hLu0JD78LYE2IrmjcM5Xk5vzL+QH27heoEr9GSwrGCMgcDBNV0X9eXY8w=Prob 11 8. Why do college professors who usually spend five to seven years in graduate school and play such an important role in shaping our society make so much less than a Hollywood producer such as Jerry Bruckheimer, who is unknown to most people (he has produced over 40 films and a dozen TV shows)?Question
ANQh0tq9kDLF52lsHhbIuVict+TxRIEfPZLaF5LmhqMZ1N90ehLEOstxoPysLroZDbRGiPsb5iorpvu49dDK4+4NP2UtxQAIMIGLAaRcuL0eOIYnEe4yQB6SYM21Ze+8T5Gd13RKEhZB91zkOJBM0pY1kM+phT8/Vv+fbLT//msC+ajOPkL2WypMNE94Izxpf8prh88iOO31apgK/9DrzdCehtmZMM2cqueuRdXliNFkl/zOTZ6uYzqHn7bU+vv+33V7WwC3MybgWfZYJf6E+b7nFUuZzVHAXm10DAFmtmbfzHQTAYK/J70LqLz2YsiqlfRZYXzkQpxgWkpMnVQ70/t6oWhDV5NxH0ROMrkXy5eqXydLHP13ZQ0wSTKbVE2VRS0YyeFmY6/TgoAyp+N04Lw8NxGvDAVOmxlIVUnO4E1Em9QUProb 11 9. Why do we permit price discrimination with different ticket prices at movies based on age, or ladies’ nights at bars (when women get in free or pay less for drinks), or insurance coverage, for which women sometimes pay more (health) or less (automobile), but we do not permit discrimination in wage rates?Question
AQIeHA2xLtZIfmgl6Y9b4v3NPyq7zScBxXjlR/cCL1GODpeR76sa9bXnArM7o7xgMLaxGRWlgArBDcISQ6VWIjTfaNoSWSa3mzFH6wTJd/uLqtjWdrAsQsBECB2uaG4J59ET9nZZ5wPFQBv+z18x/Q==Prob 11 10. Has globalization made it more difficult for unions to negotiate higher wages? Why or why not?Question
yulaER72aO564XGsodb+79RT0pzoZO9tulgX1Pfnd+/ef9d8yEODv+UK2Ly3ixs9HRvjOqMbR9VGZkrvYxJFanKAi/k5HTOwzoE2qqDQc5r8WYSq9cUjPZOmART+9DwRv4+oxoMzpe3ByNYScPAQdQthz35gQmamPljyomg6jGyEjPaYEhn52diggdePUXBcirAKuzw/BtlX3X8vK3/8v3GFgTUoJXFOH2/FErW5KRuj7jxonHHO0tinPy2UYBiuXrNDQXArYRqRIAh18F1muRy6V6iNuZABIekqmLFrSSAMCp3Ynaj9DHPP7/4=Prob 11 11. The airline pilots union has been very successful in negotiating six-figure salaries for pilots. The unions representing flight attendants have not been nearly as successful. What probably accounts for the difference?Question
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Prob 11 12. Fifty years ago, married women ages 35 to 44 worked for pay only 10 hours per week on average; today they work over 26 hours on average. During the same period, the work-week for married men of the same age has been relatively constant, between 42 and 44 hours. Can you think of reasons why women’s working hours have nearly tripled in the last half-century?
301
In the News
Question
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 11 13. Tightened visa rules since September 11 have reduced the number of high-skill legal immigrants. Stiffer security rules and insufficient personnel have substantially increased the waiting time (and certainty) for visas. A New York Times article titled “Immigration and American Jobs” (October 19, 2012) reports a finding by economist Giovanni Peri that the wave of high-skilled legal immigrants from 1990 to 2007 increased the average wage of American workers by lifting the overall economy. Such findings have increased the pressure for immigration reform allowing more foreign graduates of American universities in the math, science, and technology fields to become permanent residents in the United States. Using the tools of labor demand and supply, evaluate the merits of the proposed immigration policy.Question
gZJ172uLGs7t1cS8Bb1WHkMDz9qklZUeRxSymqQqnO9+duhX3HDEeU07OKAy7LcPwMknGroSGb0tgZfhBQYNhZXfChGhl9lVIC/1N+npJcT2xn0Gde5L1mh0xNYkIalxZRZq2ZpMj+9x42GL1dk86TbJExKi5JnxqXR5iorREQ9NFVS3JIemDPi7/ROvLG1MqGFhF878Sc3C1wbT4jgwJU3sx2F5UcGwMtwt0ifTRKfUsWSGq1Blc4E3SS5xkHPSwqAYvbayOJKaxYMs1YOl5Jr4nYgsLbV83DVdOD4DbgGDFuI1nsqAlrreu0/NIHU9nMJtddDi60CLBaM/m9bku11H0V+HKlAR+poGHXOR6OH8W4xUWxVIvTRTmm+34Smb/3aXJDmskfxsd6JtlnYrDD+yFgnbEyUuNeSAODhLRuMT3aO4w9Jg5+KlFL+0r19MProb 11 14. The National Bureau of Economic Research in December 2010 reported a study by Elizabeth Wilde, Lily Batchelder, and David Ellwood that a highly skilled woman loses anywhere from $230,000 to $349,000 in lifetime earnings by having children. What are the reasons that having children reduces women’s earnings so much?
Solving Problems
Question
vmE5aYnMEtjke5bCxcOolnIGYHnYypRulr4nUGGTt0Rkvu8LueUMJohJ9I+R6D4Ed7YEprXju0GBgSIEh+X5b9g743Sid2vsF9B3jEqn5lJOJmCnF3Qp91qTmC86m5Xi9pKFZmpLbt4nQJk/7BsIGeFDx4X1KnWc0Bc8hh6glTXjJMq4BCm8gzhYSBuX9nMo4XQxpBV7I2VEGDjYu+wRDqlv5TjymLF35/hBNledVrm5Z1w5VvLyf7glr81z6opWEiRuk/UrmEZ3rNIw6J4u2Sy88E4/wMgc+KQoqrWrdSIgCGMw9W2AJZeaS4Rn2Cz161AkIs0/SzngUcQ6j1MbxoTg7hPrdLd5NgJLe9v8q9m/kEWvlz0/MXXrBodybHl3//WbMswzgivhjtWolzL/9w==Prob 11 15. Joe’s Mechanic, which provides oil changes for $40 per car, decides to increase the number of mechanics on staff from four to five. As a result, the number of oil changes completed in a day increases from fifteen to seventeen. What is the marginal revenue product of the fifth worker?Question
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 11 16. In the following table, suppose the price of output is $10 per unit. What are the marginal physical product and the marginal revenue product of the sixth worker? If the wage of each worker is $150, should the sixth worker be hired?
Question
TKsBtK9KXY0Bkqf16idQzFRXUOw3WSQdjsUAxdAk0cICxJA/YLCnnG/KX7+eqnQGPT1Bct5SpkvJrFcOGkUW43WgUR7FCc45g8CDW6aiswty6yr7OpqW4neo7JWp12bi0cBDbjYpyK0G9g8bZShoG6SqDFN3cBp4qJtxfdHx9za9Y+JB8MvOzbY2xnBlJK/ctLcEZim2HbkV6YXQeGFEzEl2BaOhUNm/iVO8aLRuMcahL6Kq20zRHKHU9YxOYGJhooRFmKvIsWzFXEdQwwKnHYbhWmZ+jg9fu4sta+MT9+DODiHYProb 11 17. According to By the Numbers, what is the average starting salary of workers with an undergraduate degree in economics? What is the average mid-career salary of workers with an undergraduate degree in economics?Question
DmsNI4vbNb+8B7RJ/Ptcu7bh+Fp8EkXj3zkd5m5eTRCGlt3odcPU/7GktTFRAM0Y5swLrmE3FHIxwKwWLKaTzLM152NQldxPapaknmv35iD3TLt/Q/C3qJaYopNGJB3HIvhCpO9oq6sLuc56+Mf7gLWl3jQc5oeFjpWjYiSNgldDp5zZbMbhwIb4RvZrNCRBwbuva9WfIUdaDSRIProb 11 18. According to By the Numbers, during which seven-year period did the percentage of Americans with flexible work schedules increase the most?