2. Suppose that back in 1870 the average household wealth in a U.S. state was 20 + w under coverture, where w is the average wage rate a married woman earned 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 and Leuck (2002), that under coverture the household was like a firm managed and owned by the husband, whereas under self-ownership it was like an equal partnership between wife and husband. (a) Explain why the household wealth increased more rapidly through the wife's market wage under self-ownership than under coverture. (b) Comparing the average husband's wealth under coverture and the wife's self-ownership, explain why he would have preferred coverture for low values of his wife's wage but self-ownership for high values. (c) Draw a graph to identify the value of wives' wage rate beyond which husbands would have been willing to voluntarily abandon coverture in the state.
2. Suppose that back in 1870 the average household wealth in a U.S. state was 20 + w under coverture, where w is the average wage rate a married woman earned 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 and Leuck (2002), that under coverture the household was like a firm managed and owned by the husband, whereas under self-ownership it was like an equal partnership between wife and husband. (a) Explain why the household wealth increased more rapidly through the wife's market wage under self-ownership than under coverture. (b) Comparing the average husband's wealth under coverture and the wife's self-ownership, explain why he would have preferred coverture for low values of his wife's wage but self-ownership for high values. (c) Draw a graph to identify the value of wives' wage rate beyond which husbands would have been willing to voluntarily abandon coverture in the state.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter20: Economic Growth
Section: Chapter Questions
Problem 4SCQ: Assume there are two countries: South Korea and the United States. South Korea grows at 4 and the...
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