Topic A Problem: The Canada Pension Plan (CPP) is a federal government program that provides people with retirement income. Either buyers of labour (employers) or sellers of labour (workers) could be taxed to pay for CPP, but instead, the tax to pay for CPP is evenly split between employers and workers. In 2022, a worker pays a tax (5.7% of their earnings) to CPP, and the employer pays a tax (5.7% of their worker's earnings) to CPP. Most people believe it sounds fair for workers and employers to split the tax bill for CPP. How would things change if the law changed, so employers no longer paid their half, and instead, workers had to pay all of the taxes for CPP? What things influence how much of the burden of the CPP tax is incurred by workers or employers? If CPP and the CPP tax were eliminated would the number of workers with jobs change? In the

Topic A Problem: The Canada Pension Plan (CPP) is a federal government program that provides people with retirement income. Either buyers of labour (employers) or sellers of labour (workers) could be taxed to pay for CPP, but instead, the tax to pay for CPP is evenly split between employers and workers. In 2022, a worker pays a tax (5.7% of their earnings) to CPP, and the employer pays a tax (5.7% of their worker's earnings) to CPP. Most people believe it sounds fair for workers and employers to split the tax bill for CPP. How would things change if the law changed, so employers no longer paid their half, and instead, workers had to pay all of the taxes for CPP? What things influence how much of the burden of the CPP tax is incurred by workers or employers? If CPP and the CPP tax were eliminated would the number of workers with jobs change? In the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. 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…
In 2015, you take out a $100,000.00 home mortgage loan to purchase a house. The lender, First Bank, files its mortgage deed and perfects its security interest in your home. In 2016, you borrow $30,000.00 from Second Credit Union for emergency foundation repairs and give the lender a second mortgage against your home, which it immediately files. In 2017, you get sued and there is a judgment entered against you in the amount of $50,000.00. In 2018, you stop making payments on your home and it is foreclosed on. If your home is sold at auction for $120,000.00, who gets what? (Fill in the amounts - numbers only, no commas, decimals or $ signs) First Bank will recover Second Credit Union will recover Judgment creditor who sued you will get
What is interesting about one of the HRM Functions, "Compensation and benefits".
Case B: Jessie Pharmacy. Jessie, a pharmacist, is planning on opening her own pharmacy. Jessie Pharmacy is expected to generate yearly revenue of $500,000. Jessie will run the pharmacy herself on full-time basis. Jessie’s alternative employment options are as follows: Continue to work as a senior medical representative for $50,000 per year. Accepts a research position in another company for $70,000 per year. Jessie expects to spend $350,000 per year on purchasing drugs and cosmetics for resale to her customers. She will also need to hire three employees: an assistant, an accountant and a custodian, for whom the total salaries to be paid are expected to be $48,000 per year. Jessie owns the building in which her pharmacy is supposed to be; however, she could rent out the pharmacystore space for $42,000 per year. Calculate Jessie’s accounting profit and economic profit. In your opinion, should Jessie proceed with opening her own pharmacy? Justify your answer
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[Related to Solved Problem 3.1B] Some companies offer their employees defined benefit pension plans. Under these plans, employees are promised a fixed monthly payment after they retire. The federal government regulates some aspects of these plans A reporter for the Wall Street Journal wrote that under a former employer's pension plan she was to receive $423 per month beginning in 14 years when she turned 65 years old. She received a letter from her former employer offering a one-time payment of $32,088 in exchange for her agreeing not to receive the monthly pension payments Source: Anne Tergesen, "Should You Take a Lump-Sum Pension Offer?" Wall Street Journal, June 5, 2015 Suppose that the reporter's former employer expects that the reporter will live to be 85 years old. That means she would receive the pension payments for 20 years The total amount she would receive would be $423 per month x 12 months per year x 20 years $101.520 Should she turn down the one-time payment? OA. Yes, the…
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.
Consider an individual aged 64 who is eligible to collect full social security (public pension) benefits of $6,000 for a year. They have no other income but can work at a weekly wage rate of $600 for a maximum of 52 weeks. Receipt of benefits from the social security program is retirement tested. Specifically, the individual can earn up to $9,000 in annual wage income without a reduction in benefits; however, after $9,000 of earnings, benefits are reduced by 50% for every dollar earned, until the benefits are exhausted. a) Carefully draw and label the budget constraint for this individual. b) Suppose previously there was a retirement test, and then the test is eliminated, i.e., the individual now is allowed to keep all benefits, irrespective of their labour earnings. How would this affect the individual’s labour supply? Question Two David is a 70-year-old accountant. After serving his accounting firm for 45 years, David decides to retire soon. David has great passion for vintage cars…
20 Interest rates are usually during the latter stages of a downswing in the South African business cycle. An improvement in economic activity is normally triggered by an increase in Manufacturing production rises during an upswing and in the latter stages of the upswing, inflation, and interest rates a) low; exports; increase b) low; consumption; fall c) low; imports; fall d) high; exports; increase
Consider an economy which is divided into different sectors, each producing a differentiated product. Workers in each sector are organized in a trade union which monopolizes the supply of labour to all firms in the sector. Because of its monopoly position, the trade union in each sector may dictate the nominal wage rate to be paid by employers in that sector. However, employers are free to choose the level of employment. For simplicity, assume that the number of working hours for the individual worker is fixed, so total labour input is proportional to the number of workers employed. Workers in sector are educated and trained to work in that particular sector, so they cannot move to another sector to look for a job. If a worker fails to find a job in his sector, he therefore becomes unemployed. His real income will then be equal to the real rate of unemployment benefit . An employed worker in sector earns the real wage where is an index of the general price level, so his net income…
Many people hire a local. The rent must be paid in advance on the last of each month. Due to liquidity problems, he will not pay the rent due on the last day of March until 10 May. The landlord, who previously wanted to get rid of him as a tenant, dismisses him as a tenant on 14 May, referring to the fact that the tenancy has been forfeited due to Mange's delay in rent. Mange gets desperate and refers to the fact that he actually paid the rent, albeit a little late. What applies
Dr. Smith, a new professor, makes $85,000 his first year. He is guaranteed 7 years of employment at the university. Each year his salary increases at a rate of 8 percent. The interest rate is 5 percent. Show Dr. Smith’s discounted stream of earnings over this seven- year period and use these figures to calculate the present value.