4. Asymmetric information and labor marketsArjun is the manager of a factory. Workers at the factory are assigned to one of two tasks, one of which requires skilled labor and one of whichrequires unskilled labor. Because skilled workers earn a higher wage than unskilled workers, everyone who applies for a job says they're skilled.Arjun's challenge is to figure out who is actually a skilled worker and who is an unskilled worker.Suppose that Arjun would like to use the economic concept of signaling to separate out worker types.Which of the following scenarios illustrates this concept?Skilled workers enroll in an online certification course to demonstrate their ability.Skilled workers pay to take a certification course to demonstrate their ability.Arjun voluntarily pays all workers a higher wage in hopes of attracting and retaining more productive workers.Arjun implements a test to determine whether applicants are skilled or not.Suppose, instead, Arjun considers paying efficiency wages to increase the factory's profitability.True or False: Efficiency wages are set below the average industry wage and are intended to give the firm implementing them a competitive advantageover rivals.TrueFalse

According to the labor economics theory of efficiency wages, companies should pay their employees…

Answered: 4. Asymmetric information and labor…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter16: Labor Markets

Section: Chapter Questions

Problem 16.3P

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Q.7 Given following separate equations. Variable educ measures years of schooling, while age indicates age of the individual. Wage measures monthly wage (in hundred Kina) of individual. log(wage) = -0.9048 + ₁.educ (1) log(wage) = -0.6742 + ₂.log (age) (2) wage = wage -0.8709+ B3. educ (3) -0.7635+ B4. log (educ) (4) = What is the interpretation of B₁, B₂, B3, B4?
3. In the upcoming year, the income from your current job will be $50,000. There is a 0.5 chance that you will keep your job and eam this income, and 0.2 chance that you will get a rise and earn 75,000. However, there is 0.3 chance that you will be laid off, putting you out of work for a time and forcing you to accept a lower paying job. In this case, your income is $25.000. The expected value of your income is thus $47,500. a) If your utility function has the formula 5001 - 0.0002/, determine the risk premium associated with this lottery. b) Provide an interpretation of the risk premium in this particular example.
3. In the upcoming year, the income from your current job will be $50,000. There is a 0.5 chance that you will keep your job and earn this income, and 0.2 chance that you will get a rise and earn 75,000. However, there is 0.3 chance that you will be laid off, putting you out of work for a time and forcing you to accept a lower paying job. In this case, your income is $25.000. The expected value of your income is thus $47,500. a) If your utility function has the formula 5001 - 0.0002f, determine the risk premium associated with this lottery. b) Provide an interpretation of the risk premium in this particular example.
6
If you an? out of school but working part time, are you considered employed or unemployed in U.S. labor statistics? If you are a full time student and working 12 hours a week at the college cafeteria are you considered employed or not in the labor force? If you are a senior citizen who is collecting social security and a pension and working as a greater at Wal-Mart are you considered employed or not in the labor force?
5 ONLY part Q4b, answer for part a is given
Title 1. Suppose that the indifference curves between consumption and leisure are concave to the origin.... Description 1. Suppose that the indifference curves between consumption and leisure are concave to the origin. How many hours will a person allocate to leisure activities? 2. Suppose that the price of goods purchased in the marketplace rises. What is the impact of this price increase on the worker's reservation wage, on the worker's probability of entering the labor force, and on hours of work? 3. What happens to a worker's desired hours of work if employers pay an overtime premium equal to "time and a half'(that is, 1 .5 times the straight-time wage) for any hours worked in excess of 40 hours? What would happen to hours of work if the overtime premium were raised to double the straight-time wage?
1. Kelly spends most of her time taking care of her home and children, but she helps in her husband's computer software store 4 hours a day from Monday to Friday. Which category of employment status fits Kelly’s situation? 2. Ashton is 15 years old and helps out in his father’s grocery store 4 hours a day from Monday to Friday. Which category of employment status fits Ashton’s situation? 3. Justin is a full-time college student looking for a job. Which category of employment status fits Justin’s situation?
John is a talented artist who received an offer to go pro gymnast. He graduated fr V the business school of Talent University with a 4.0 GPA and scored 826 on his MCAT. Having all the needed skills, John is considering a career in any of the following tracks. John collected information related to potential income and cost for his options. Since he is considering average income, John divided his professional career into 5 periods of earning Period 0 Occupation Period 4 Period 1 Period 2 Period 3 Neurosurgeon -20 15 30 Accountant 4 6. 10 12 14 Artist 3. 3. 3. Gymnast 25 10 Assume that John's discount factor d30.85. Find net present value of each career what is the NPV of the most lucrative option. 12:21 AM tScn Home F8 End PgUp F11 F9 F10 Pg Dn F12 Ins 20
→ Question 19 esc Which of the following is true about labor productivity? O it is the amount of total factor productivity (TFP) per unit of labor it is a more general and better measure of productivity than TFP O it is more difficult to measure than TFP O all of the above Onone of the above f1 A Moving to another question will save this response. Type here to search ? Q 12 W f3 # f4 E $ Ei v olo R 5 f6
11. Consider a world in which all individuals complete high school, and then they have T years remaining before they retire. Upon graduation from high school, individuals choose between the following two options: (1) start working right away with just a high school degree, or (2) attend two years of college in order to acquire an associate's degree before they enter the work force. Assume that college students are unable to work while they are attending college. Define the following variables: etc.) EH represents the annual earnings of a high school graduate EA represents the annual earnings of someone with an associate's degree C represents the annual direct costs of attending college (such as tuition, books, r represents the interest rate Assume that EA>EH. Also assume that individuals seek to maximize their lifetime income. Derive an equation determining whether a person will choose to attend college. Write this equation in a form which shows that the person will attend college only…
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