3.. Civil engineers in Tyler Texas all work at the only engineering firm in town. They can expect to earn $102,400 per year, but because the firm works on big highway projects that are uncertain, demand fluctuates. Every year there is a 50% chance they will lose their job and will have to move to another town to find another job elsewhere (where they will also earn $102,400). The cost of moving is $18,300 (so in a year where they move, they will only have a disposable income of $84,100). In Dallas, civil engineers lose jobs just as often, but they can always immediately find another job in such a big city without having to move. For all civil engineers, the utility from income is based on this utility function: U=√ Disposable Income. Based on the above information, what is the annual wage paid to civil engineers in Dallas (assuming that income is the only determinant of utility and that labor supply adjusts so that a civil engineer's utility is the same everywhere)?

3.. Civil engineers in Tyler Texas all work at the only engineering firm in town. They can expect to earn $102,400 per year, but because the firm works on big highway projects that are uncertain, demand fluctuates. Every year there is a 50% chance they will lose their job and will have to move to another town to find another job elsewhere (where they will also earn $102,400). The cost of moving is $18,300 (so in a year where they move, they will only have a disposable income of $84,100). In Dallas, civil engineers lose jobs just as often, but they can always immediately find another job in such a big city without having to move. For all civil engineers, the utility from income is based on this utility function: U=√ Disposable Income. Based on the above information, what is the annual wage paid to civil engineers in Dallas (assuming that income is the only determinant of utility and that labor supply adjusts so that a civil engineer's utility is the same everywhere)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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