2. Suppose that back in 1870 the average household wealth in a U.S. state was20 + w under coverture, where w is the average wage rate a married womanearned for market work in that state. Under the wife's "self-ownership," sup-pose that the total household wealth was 10 + 4w. Assume, as do Geddes andLeuck (2002), that under coverture the household was like a firm managedand owned by the husband, whereas under self-ownership it was like an equalpartnership between wife and husband.(a) Explain why the household wealth increased more rapidly through thewife's market wage under self-ownership than under coverture.(b) Comparing the average husband's wealth under coverture and the wife'sself-ownership, explain why he would have preferred coverture for lowvalues of his wife's wage but self-ownership for high values.(c) Draw a graph to identify the value of wives' wage rate beyond whichhusbands would have been willing to voluntarily abandon coverture inthe state.

The household wealth value is given as w is considered the average wage rate of married women earned…

Answered: 2. Suppose that back in 1870 the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. 3 takes the wage rate as given and chooses how many hours of work to supply in the labor market. Suppose ry) Economic theory implies that an individual worker you have information at the individual level from a sample of 1000 married women. H₁ = Bo + B1 W₁ + B₂Si + ei, where H is hours or work supplied, W is the wage rate, S is the salary earned by the husband, i is the subscript for the individual woman. (-). Suppose the estimated coefficient for B₁ is negative. Is the negative sign an expected result? Can economic theory explain this sign? Clearly discuss by considering all the relevant effects.
6. A worker with a marginal value product of can earn w, = k√e in self- employment. Marginal value products vary across the population according to the uniform distribution, i.e., 0~U[0, 2]. Firms cannot measure individual productivity, so all workers are paid a wage equal to the average of the marginal value products of those employed. & (a Find the condition for k under which every worker will choose self- employment. Also, find the condition for k under which all the workers will choose to be employed. Assume that k = 1. And, each worker can take a free test which can only te whether his marginal value product is in [0,1] or in [1,2]. Who will take the test and who will not? Also, who will be'self-employed and who will be employed? (c) Assume that k = 1. And, each worker can take a test at the expense of c which can reveal his marginal value product exactly. Who will take the test and who will not? Also, find the condition for c under which there exist some workers who will choose…
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Consider a Lorenz curve given by f(2) = 2" for 0 1. What happens to the Gini index G. I as n+ 00, and what's the interpretation of that result? Select the correct answer below: O As n+ 00, G.1 - 0, denoting complete income inequality. As n+ 00, G.I- 100, denoting perfect income equality. As n0, G.I- 100, denoting complete income inequality. O As n 0, G.I 0, denoting perfect income equality
what is the meaning behind Frederic Bastiat's Negative Railroad? Be thorough and prove your understanding.
All other things equal, the wealth effect means that Multiple Choice O O O people with high income tend to spend a higher percent of their income than the poor. saving rates tend to fall as stock and home prices rise. those who save more are significantly more likely to become wealthy. those who are wealthy tend to have much more political power.
Explain in detail factor price equalisation. Discuss reasons why the factor price equalisationproposition may be unlikely to hold when we compare factor prices across economies.
Consider me and my twin sister, G & J. We have the same life cycle wage path throughout our lives and we have the ability to anticipate our future wages. We treat consumption as a normal good and we treat leisure as a normal good. A: Draw a graph to illustrate how our life cycle path would differ if J receive a one-time inheritance at 40 years old. B: Compare the life cycle path with a graph of hours worked if J always knew she would get a receive a one-time inheritance at 40. Question
Labor demand and supply of labor is one of the external factors that impact compensation practices. If supply of labor is less than the labor demand, most employers offer to jobseekers. Higher rate Going rate Lower rate Market rate A clothing manufacturing utilizes Merrick's Multiple Piece Rate System that sets the standard output to 100 units per week and normal piece rate at 5 RO per unit. If Worker Z's actual weekly output is 100 units, solve earning per week. 650 О 500 O 550 O 600 ооо о
8. Using adjusted R-squared to choose between nonnested models Consider the following two models relating wages and education: Model 1 wage = Bo + Bieduc + B2 educ² + u where and R² = 0.393 R2 = 0.048 Model 2 log (wage) Bo + Bieduc + B2 educ² + u where R2 = 0.432 R²= 0.009
Elsa and Anna are two students each considering whether to pursue a college education before entering the job market. For each worker, an education level of E = 1 indicates that she has completed college and earned a degree, while E = 0 indicates she has not. Elsa can generate VE = 36 worth of output per hour while Anna can only produce V4 = 12 per hour. 3. Obtaining a degree is costly, and the students must pay for their educations by taking out student loans that will be repaid during their working years. Elsa is a naturally capable student so the degree costs her the equivalent of CE = 18 per hour in future wages, whereas Anna struggles with her studies and must pay C4 = 27 per hour. Note that their education %3! levels do not impact their productivity. Hans is an employer who cannot observe the workers' innate abilities, but can observe their education levels. The labor market is competitive, so that Hans must always offer a wage equal to his reservation price, and thus makes zero…
Workers are compensated by firms with benefits in addition to wages and salaries. The most prominent offered by many firms is health insurance. Suppose that in 2000, workers at one steel plant were paid $30 per hour and in addition received health benefits at the rate of $6 per hour. Also suppose that by 2010 workers at that plant were paid $31.50 per hour but received $13.5 in heakth insurance benefits. a. By what precentage did total compensation (wages plus benefits ) change at this plant from 2000 to 2010? Total compensation increased or decreased by________ percent? What was the approximate average annual percentage change in total compensation? b. By what percetage did wages change at this plant from 2000 to 2010? Wages increased or decreased by ______percent? What was the approximate average annual percentage in wages? c. If workers value a dollar of heath benefits as much as they value a dollar of wages, by what total percentage will they feel their incomes have risen over…

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