Suppose the rural wage is $3 per day. Urban modern sector employment can be obtainedwith 0.4 probability and pays $8 per day. Using this information, what would be the rationaldecision of rural population?1) since urban wage rates are much higher than the rural wages, they encourage people tomigrate in spite of high level of unemployment.2) people would be indifferent between migrating or staying3) people are rational; the high unemployment rate would reduce their rural-to-urbanmigration.4) since people are risk neutral, it would be rational not to migrate in order to avoid risks.

The key reasons are:The urban modern sector wage ($8 per day) is significantly higher than the rural…

Answered: Suppose the rural wage is $3 per day.…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Follow-up questions. d. Let D be the difference in marginal product between an experienced worker and a new worker (MPe − MPn). Suppose that robust, experienced workers would prefer not to pool with sickly workers at their firm, and so they seek out a new job with an employer who does not offer health insurance. What will be the wage of the robust worker at the new job during the first year there? Keep in mind, these workers will no longer be experienced because they will be adapting to a new firm. Under what conditions will it make financial sense for the robust worker to change jobs? Your answer should be an inequality that includes D, θ, Vr, and Vs. e. D is a measure of job-specific human capital; as workers learn the job, they become more productive so D > 0. However, not every job or industry has the same value for D. In some lines of work D is low, while in others D is high, simply because of the nature of the work. Given the results, you have seen in this problem, in which…
a)How the following factors influence the present value of net benefits of migration. i) Transportation costs b) If the elasticity of demand for type Z workers is -0.5, then an increase of wage rate from $45 to $55 will cause the quantity demanded to fall by _____ percent. c) What is the difference between geographic labour mobility and occupational labour mobility?
consider the following two proposals to reform unemployment insurance. Explain the argument for and against each reform. (a) The insurance payment would be increased so that it replaced 100% of a worker's regular labor income for 26 weeks. (b) Each worker would be paid a lump sum equal to 10 weeks of his or her labor income at the start of the spell of unemployment. there would then be no other payments.
A real estate firm faces two kinds of employees, those able to sell 10 houses per year, and those able to sell 5 units per year. High-productivity employees are willing to work for $100,000/year, low-productivity employees are willing to work for $50,000/year. Which compensation scheme would be able to weed out the low-productivity workers best? a. offer a salary of 100K b. Offer a salary of $75K with unit commission c. officer a sale commission of $10K per unit d. Office a sales commission of $20K a unity starting with unity 5
If older workers have a tax elasticity of labor supply equal to 0.25, by how much will their work activity decline when they reach the Social Security earnings test limit? (Recall that the Social Security earnings test limit is 50 percent. Assume explicit taxes of 20 percent below that limit. Use the midpoint method.) Instructions: Enter your response as a positive percent rounded to one decimal place. Do not include a negative sign (-) with your answer.
Fatima has decided to work for an entrepreneur in Italy because the country's high entrepreneurship rate provides her employment protection and strong unemployment insurance ( a) True ( b) False
In the absence of any legal barriers on immigration from Neolandia to the United Kingdom, the economic conditions in the two countries generate an immigrant flow that is negatively selected. In response, the United Kingdom enacts an immigration policy that restricts entry to Neolandians who are in the top 10 percent of Neolandia’s skill distribution. What type of Neolandian would now migrate to the United Kingdom ?
None
Gerhart & Newman (2020) discuss how compensation (pay) may be a measure of justice, i.e., gender, race, culture, etc. They further state that stockholders are interested in executive pay. Why does it matter, and how is it fixed? How risky are these decisions to employee retention?
1
The AB line in the below graph represents a worker's budget constraint (AB line). A utility- maximizing worker chooses the consumption- leisure bundle at point P, where the indifference curve is tangent to the budget line. Please analyze the impact of a new unemployment benefit program that consists in an amount "AG" if the worker is unemployed. This benefit is lost if the worker finds a job (even if he only works for one hour). B G A U1 Hours of Leisure
A3

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