Teachers can work up to 180 days in a school year, and they earn the wage w for each day that theywork. Assume that sick leave is at the discretion of each individual teacher. In other words, theschool does not ask for proof of illness, so teachers can take leave even when they are not sick, andteachers are free to take as much leave as they want. Also assume that teachers have no nonlaborincome (i.e., Y=0). In terms of notation,E represents the teacher's annual earningsL represents annual days of sick leave taken by the teacherw represents the wage that the teacher earns for each day of workU(E, L) represents the teacher's utility functionAssume that E and Lare normal goods. Whenever graphing the model, put E on the vertical axis andLon the horizontal axis.Finally, assume that teachers receive sick pay according to the following policy. For the school year,each teacher is given 20 fully-paid sick days, and after these have been used up, each teacherreceives an additional 60 days of sick leave at two-thirds of their normal pay.Before the sick pay policy was instituted, teachers received no pay for days that they did not work.Consider a teacher who, prior to the introduction of sick pay, took 50 days of sick leave. Accordingto labor supply theory, how will introduction of the sick pay policy described above change theamount of sick leave that this teacher takes?# 1Sick leave will increase because of substitution and income effects that reinforce each other.O Sick leave will increase because of a substitution effect.Sick leave will not change.Sick leave will increase because of an income effect.O The change in sick leave is indeterminate because of conflicting substitution and income effects.Before the sick pay policy was instituted, teachers received no pay for days that they did not work.Consider a teacher who, prior to the introduction of sick pay, took 90 days of sick leave. Accordingto labor supply theory, how will introduction of the sick pay policy described above change theamount of sick leave that this teacher takes?# 2O Sick leave will increase because of substitution and income effects that reinforce each other.Sick leave will increase because of a substitution effect.Sick leave will not change.Sick leave will increase because of an income effect.O The change in sick leave is indeterminate because of conflicting substitution and income effects.

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Greg's Ice Cream produces 1160 gallons of ice cream per day. Each employee works one hour and has a productivity of 20 gallons an hour. How many employees does Greg have? 160 56 58 None of the above are correct
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…
For the following alternatives, argue whether it is true, false or uncertain, according to the following statement:"If the marginal productivity value (MVP) of the last worker hired is $10 and the wage is $12, then the firm":(a) Will have an economic utility.b) Needs to decrease the wagec) It needs to expand productiond) It needs to decrease the number of workers hired.
When workers move from one industry to another in response to demand changes, this is an example of Multiple Choice O factor mobility. the decreasing investment in human capital. capital stock. factor quality.
A college education will more than likely lead to a higher lifetime stream of earnings (all things being equal) for those who obtain one. True False
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.
A company has 350 employees who work 120 hours a month each. Each worker earns $21 per hour. There is a profitable project the company would like to start, but it would require an additional 21,000 working hours within three months to be completed, and all the employees are fully loaded with other projects. The company does not want to hire new staff; they would like the project to be completed by the current workforce instead.Given that the wage elasticity of labor supply is 0.8, calculate the hourly wage the company should offer its employees to encourage them to work on the new project. Use the midpoint method and round to two decimal places throughout your calculations.
A) Describe the assumptions of personnel economics. How are these assumptions unique compared to other perspectives on work and the employment relationship? Provide some examples of the HR implications that result from these assumptions.
Which of the following is an example of an objective assessment of employee performance? Sarah, a software engineer, is judged by her ability to collaborate with her co-workers. Steven, an architect, is judged by the creativity of his designs. O Janet, a teacher, is judged by her ability to identify and correct problems in her classroom. Darrell, a car salesman, is judged by the number of cars he has sold. Lisa, a media producer, is judged by the quality of the videos and simulations she produces.
Consider the following model of labour supply. There is a representative worker with the following utility function: U(C,L) = CªL²-a where U is utility, C is consumption, L is leisure, and a is a parameter that governs the importance of consumption to the worker's utility relative to leisure. a must satisfy 0 < a < 1. Consumption and Leisure are always positive (by definition) The budget constraint and time constraint are: C = wh + V h = T – L where w is hourly wage, and V is non-labour income, T is time endowment. Here, w,V and T are parameters. h is hours work a) Does the utility function exhibit the "the more the better" and "law of diminishing marginal utility" assumptions? Show it. b) Characterize the optimal leisure and consumption as functions of the parameters a, w, V and T
If one worker can pick $10 worth of grapes and two workers together can pick $24 worth of grapes, the Multiple Choice marginal revenue product of the second worker is $14. marginal revenue product of each worker is $17. data given are insufficient to determine the marginal revenue product of either worker. marginal revenue product of the first worker is $14.
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?

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