Answered: Mia Denton was an accountant in 1943… | bartleby

Microeconomic Theory

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.2P

See similar textbooks

Related questions

Question

Select the correct one and explain it.

Mia Denton was an accountant in 1943 and earned $21,000 that year. Her son was an accountant too and he earne
$27,000 in 1944. Suppose the price index was 18.3 in 1943 and 20.2 in 1944.
Refer to Scenario 24-1. In real terms, the income of Mia's son amounts to about what percentage of Mia's income
in 1943?
a) 8.6 percent
b) 116.48 percent
c)
12.9 percent
d) 1.1 percent

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Blurred answer

Similar questions

Two labor-leisure choice diagrams are shown below. In both cases, the labor-leisure choice diagrams show how the individual's desired amount of leisure is influenced by the increase in her or his wage rate from w/ to w₂. INCOME a. 24W2 24W₁ Figure A b. Leisure is normal. Figure A HOURS OF LEISURE Figure A Figure B For each of the following statements, please indicate if the statement is TRUE (between wage rates w/ and w₂) for Figure A, Figure B, both figures, or neither figure. Please circle your response. The substitution effect is zero. Figure A Figure B Figure B c. Leisure is neither normal nor inferior. INCOME Figure B 24W2 24W1 Both figures Both figures HOURS OF LEISURE Both figures Neither figure Neither figure Neither figure
Suppose Carl’s wage-schooling locus is given by Years of Schooling Earnings 10 $30,000 11 $35,000 12 $40,000 13 $45,000 14 $50,000 15 $55,000 16 $60,000 17 $65,000 Derive the marginal rate of return schedule. When will Carl quit school if his discount rate is 14 percent? What if the discount rate is 9 percent?
5
1
A bank has $5 million in capital that it can invest at a 5 percent annual interest rate. A group of 50 workers comes to the bank wishing to borrow the $5 million. Each worker in the group has an outside job available to him or her paying $50,000 per year. If the group of workers borrows the $5 million from the bank, however, they can set up a business (in place of working their outside jobs) that returns $3 million in addition to maintaining the original investment. a. If the bank has all of the bargaining power (that is, the bank can make a take-itor- leave-it offer), what annual interest rate will be associated with the repayment of the loan? What will be each worker’s income for the year? b. If the workers have all of the bargaining power (that is, the workers can make a take-it-or-leave-it offer), what annual interest rate will be associated with the repayment of the loan? What will be each worker’s income for the year?
Suppose Fred's wage-schooling relationship is given by Years of Schooling Earnings 9 $28,000 10 $31,150 11 $33,700 12 $35,900 13 $37,400 14 $38,500 Derive the marginal rate of return schedule. When will Fred quit school if his discount rate is 5 percent? What if the discount rate is 10 percent?
1
The absolute value of the slope of the consumption-leisure budget line is the after-tax wage, w. suppose some workers earn w for up to 40 hours of work each week and then earn 2w for any hours worked thereafter (called overtime). Other workers may earn w for up to 40hours of work each week then only earn .5w thereafter as working more than 40 hours requires getting a second job, which pays an hourly wage less than their primary job. Both types of workers experience a kink in their consumption-leisure budget line. a. Graph in general terms the budget line for each type of worker. b. Which type of worker is likely to work up to the point of the kink, and which type of worker is likely to choose a consumption-leisure bundle far away from the kink?
Bruce and Eve currently live in Tulsa. Bruce currently earns $30,000 per year while Eve earns $40,000 per year. Bruce has family in Tulsa, so he has a higher moving cost ($25,000) than Eve ($10,000). Let’s assume that each person lives for 4 periods and have the same discount rate (0.1). (a) Calculate Bruce and Eve’s present value of earnings if they both stay in Tulsa. (b) Recently, Bruce received a job offer in Denver earning $40,000 while Eve got a job offer for $50,000. (1) Would Bruce move if he were single? Explain your reasoning. (2) Would Eve move if she were single? Explain your reasoning. (3) Will they move as a married couple? Explain your reasoning. (c) Suppose that Bruce and Eve only live for two periods now. Re-do part b. Explain why youranswers changed.
Himig has two part-time jobs, as an assistant worker in a fast food chain (Job 1) and and as a receptionist at a small hotel (Job 2). Due to her heavy load in her studies, Himig can only render 12 hours a week in her jobs. She has determined that for every hour she works at Job 1, she needs 2 hours of preparation time, and for every hour she works at Job II, she needs one hour of preparation time, and she cannot spend more than 16 hours for preparation. If Himig makes Php 40 an hour at Job 1, and Php30 an hour at Job 2, how many hours should she work per week at each job to maximize her income? (Let x = Job 1; y = Job 2).
For Questions 13 and 14, Consider that Kim is a Nurse at a hospital in Atlanta and in 2010 she made an annual salary of $30,000. She has gotten several performance raises and one promotion over the years and in 2019 she earned $46,000 for the year. The Price Index representing her buying power in 2010 was 100 and in 2019 it is 164. Kim has asked you as her private economist to tell her whether or not she is better off now or worse off now than in 2010. What is the approximate value of her buying power now expressed in 2010 dollars? Question 13 options: $46,000 $18,000 $28,000 $36,000
As a hypothetical case, suppose the typical individual has a utility function expressed as U = (C – 50)*(L – 10), where C is consumption and L is leisure time. The current wage, w, is $5 and she has a weekly return on assets of V = $100. She only has 60 hours per week to divide between work hours, h, and Leisure. A number of countries and communities are considering implementing a “Guaranteed Basic Income” as policy. A “Guaranteed Basic Income” is a government payment of a fixed a amount of money for each person Suppose the country of interest sets the weekly payment at $100. i) Using the Neo-classical labor supply with reference to specific numerical values discuss the consequences of the above “Guaranteed Basic Income”. ii) Using the basic Supply and Demand for labor approach discuss the consequences of the “Guaranteed Basic Income” policy on the overall labor market. iii) Using a feedback approach, from the Neo-classical labor supply to market equilibrium and back to labor…

SEE MORE QUESTIONS

Recommended textbooks for you

Microeconomic Theory

Microeconomic Theory

Economics

ISBN:

9781337517942

Author:

NICHOLSON

Publisher:

Cengage

Economics (MindTap Course List)

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Microeconomics

Economics

ISBN:

9781337617406

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Microeconomic Theory

Microeconomic Theory

Economics

ISBN:

9781337517942

Author:

NICHOLSON

Publisher:

Cengage

Economics (MindTap Course List)

Economics (MindTap Course List)

Economics

ISBN:

9781337617383

Author:

Roger A. Arnold

Publisher:

Cengage Learning

Microeconomics

Economics

ISBN:

9781337617406

Author:

Roger A. Arnold

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS