How high must be the new salary for the person to switch the job.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 17, Problem 1.2P

To determine

How high must be the new salary for the person to switch the job.

Expert Solution & Answer

Explanation of Solution

The current salary of the individual is $115,600 per year, which gives a utility of 340. Since the main concerns of the individual is the utility from the income, the individual must be offered an income that provides a utility of over 340 utils. The probability of the company's success can be calculated by setting the probability equal to 'p' as follows:

Let the probability of success be 'p'. Then the salary from the new job would be equal to the fixed salary and the probable profit that the individual can make. This can be calculated as follows:

Salary from new job=(1−p)(75,000)+p(350,000)Setting this equal to 340 we get,340=(1−p)(273.86)+p(591.61)317.75p=340−273.86p=66.14317.75=0.21

Thus, P must be equal to 0.21. Thus, substituting the value in the equation gives the expected value of the salary that the individual must receive in order to switch the job. This can be calculated as follows:

New salary=(1−0.21)(75,000)+0.21(350,000)=0.79(75,000)+0.21(350,000)=59,250+73,500=132,750

Thus, the new salary must be equal to $132,750 per year, which means that the new salary must be higher than the existing salary by $17,150 in order to to switch the job.

Economics Concept Introduction

Opportunity cost: The opportunity cost is the next best alternative that one forgoes while making the decisions from the range of choices provided.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Home can produce a maximum of 400 apples or a maximum of 600 bananas.Foreign can produce a maximum of 160 apples or a maximum of 800 bananas.(a) Graph and label Homes PPF. Label each axis and the slope. Use numbers.1(b) In the absence of trade, what is Homes autarky price of apples in terms of bananas?(c) Graph and label Foreigns production possibility frontier. Use numbers and label the slope.(d) Graph the world relative supply curve. Use numbers.23. (8 pts - RM) Now suppose world relative demand for apples takes the following form:Demand for apples/demand for bananas - price of bananas/price of apples. That is, RDA = Pbananas Papples(a) Graph the relative demand and relative supply curves on the world market diagram. Use numbers(b) What is the equilibrium (world) relative price of apples? (c) Show that both Home and Foreign gain from Trade and describe the pattern of trade.

A village has six residents, each of whom has accumulated savings of $100. Each villager can use this money either to buy a government bond that pays 18 percent interest per year or to buy a year-old llama, send it onto the commons to graze, and sell it after 1 year. The price the villager gets for the 2-year-old llama depends on the quality of the fleece It grows while grazing on the commons. That in turn depends on the animal's access to grazing, which depends on the number of llamas sent to the commons, as shown in the following table: Number of 11amas on the commons Price per 2- year-old 11ama ($) 1 125 2 119 3 116 4 113 5 6 111 109 The villagers make their investment decisions one after another, and their decisions are public. a. If each villager decides Individually how to Invest, how many llamas will be sent onto the commons, and what will be the resulting village Income? Number of llamas: [ 20 Instructions: Enter your response as a whole number. Village Income: $ 110 b. What is…

5. Discrimination in the labor market The following table exhibits the name, gender, height, and minimum wage 10 people are willing to accept to work as travel nurses at a regional hospital. Name Gender Height Minimum Wage (Inches) (Dollars per week) Cho F 65 $297 Frances F 64 $316 Latasha F 68 $336 Dmitri M 70 $355 Jake M 71 $374 Rosa F 65 $393 Nick M 72 $420 Brian M 71 $439 Tim M 66 $451 Alyssa F 68 $478 The lowest weekly wage that the hospital can spend in order to hire five travel nurses is ________. Suppose the hiring director of the hospital prefers taller candidates because they think it will increase revenue, and so they impose a requirement that all newly hired travel nurses must have a height of at least 68 inches. With this mandate in place, the weekly wage rate the hospital now must pay in order to hire five travel nurses increases by ________.

Answer 2

Question

Chapter 17, Problem 1.2P

To determine

How high must be the new salary for the person to switch the job.

Expert Solution & Answer

Explanation of Solution

The current salary of the individual is $115,600 per year, which gives a utility of 340. Since the main concerns of the individual is the utility from the income, the individual must be offered an income that provides a utility of over 340 utils. The probability of the company's success can be calculated by setting the probability equal to 'p' as follows:

Let the probability of success be 'p'. Then the salary from the new job would be equal to the fixed salary and the probable profit that the individual can make. This can be calculated as follows:

Salary from new job=(1−p)(75,000)+p(350,000)Setting this equal to 340 we get,340=(1−p)(273.86)+p(591.61)317.75p=340−273.86p=66.14317.75=0.21

Thus, P must be equal to 0.21. Thus, substituting the value in the equation gives the expected value of the salary that the individual must receive in order to switch the job. This can be calculated as follows:

New salary=(1−0.21)(75,000)+0.21(350,000)=0.79(75,000)+0.21(350,000)=59,250+73,500=132,750

Thus, the new salary must be equal to $132,750 per year, which means that the new salary must be higher than the existing salary by $17,150 in order to to switch the job.

Economics Concept Introduction

Opportunity cost: The opportunity cost is the next best alternative that one forgoes while making the decisions from the range of choices provided.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 17, Problem 1.2P

To determine

How high must be the new salary for the person to switch the job.

Expert Solution & Answer

Explanation of Solution

The current salary of the individual is $115,600 per year, which gives a utility of 340. Since the main concerns of the individual is the utility from the income, the individual must be offered an income that provides a utility of over 340 utils. The probability of the company's success can be calculated by setting the probability equal to 'p' as follows:

Let the probability of success be 'p'. Then the salary from the new job would be equal to the fixed salary and the probable profit that the individual can make. This can be calculated as follows:

Salary from new job=(1−p)(75,000)+p(350,000)Setting this equal to 340 we get,340=(1−p)(273.86)+p(591.61)317.75p=340−273.86p=66.14317.75=0.21

Thus, P must be equal to 0.21. Thus, substituting the value in the equation gives the expected value of the salary that the individual must receive in order to switch the job. This can be calculated as follows:

New salary=(1−0.21)(75,000)+0.21(350,000)=0.79(75,000)+0.21(350,000)=59,250+73,500=132,750

Thus, the new salary must be equal to $132,750 per year, which means that the new salary must be higher than the existing salary by $17,150 in order to to switch the job.

Economics Concept Introduction

Opportunity cost: The opportunity cost is the next best alternative that one forgoes while making the decisions from the range of choices provided.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 17, Problem 1.2P

To determine

How high must be the new salary for the person to switch the job.

Expert Solution & Answer

Explanation of Solution

The current salary of the individual is $115,600 per year, which gives a utility of 340. Since the main concerns of the individual is the utility from the income, the individual must be offered an income that provides a utility of over 340 utils. The probability of the company's success can be calculated by setting the probability equal to 'p' as follows:

Let the probability of success be 'p'. Then the salary from the new job would be equal to the fixed salary and the probable profit that the individual can make. This can be calculated as follows:

Salary from new job=(1−p)(75,000)+p(350,000)Setting this equal to 340 we get,340=(1−p)(273.86)+p(591.61)317.75p=340−273.86p=66.14317.75=0.21

Thus, P must be equal to 0.21. Thus, substituting the value in the equation gives the expected value of the salary that the individual must receive in order to switch the job. This can be calculated as follows:

New salary=(1−0.21)(75,000)+0.21(350,000)=0.79(75,000)+0.21(350,000)=59,250+73,500=132,750

Thus, the new salary must be equal to $132,750 per year, which means that the new salary must be higher than the existing salary by $17,150 in order to to switch the job.

Economics Concept Introduction

Opportunity cost: The opportunity cost is the next best alternative that one forgoes while making the decisions from the range of choices provided.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 17, Problem 1.2P

To determine

How high must be the new salary for the person to switch the job.

Expert Solution & Answer

Explanation of Solution

The current salary of the individual is $115,600 per year, which gives a utility of 340. Since the main concerns of the individual is the utility from the income, the individual must be offered an income that provides a utility of over 340 utils. The probability of the company's success can be calculated by setting the probability equal to 'p' as follows:

Let the probability of success be 'p'. Then the salary from the new job would be equal to the fixed salary and the probable profit that the individual can make. This can be calculated as follows:

Salary from new job=(1−p)(75,000)+p(350,000)Setting this equal to 340 we get,340=(1−p)(273.86)+p(591.61)317.75p=340−273.86p=66.14317.75=0.21

Thus, P must be equal to 0.21. Thus, substituting the value in the equation gives the expected value of the salary that the individual must receive in order to switch the job. This can be calculated as follows:

New salary=(1−0.21)(75,000)+0.21(350,000)=0.79(75,000)+0.21(350,000)=59,250+73,500=132,750

Thus, the new salary must be equal to $132,750 per year, which means that the new salary must be higher than the existing salary by $17,150 in order to to switch the job.

Economics Concept Introduction

Opportunity cost: The opportunity cost is the next best alternative that one forgoes while making the decisions from the range of choices provided.

Answer 6

Chapter 17, Problem 1.2P

To determine

How high must be the new salary for the person to switch the job.

Expert Solution & Answer

Explanation of Solution

The current salary of the individual is $115,600 per year, which gives a utility of 340. Since the main concerns of the individual is the utility from the income, the individual must be offered an income that provides a utility of over 340 utils. The probability of the company's success can be calculated by setting the probability equal to 'p' as follows:

Let the probability of success be 'p'. Then the salary from the new job would be equal to the fixed salary and the probable profit that the individual can make. This can be calculated as follows:

Salary from new job=(1−p)(75,000)+p(350,000)Setting this equal to 340 we get,340=(1−p)(273.86)+p(591.61)317.75p=340−273.86p=66.14317.75=0.21

Thus, P must be equal to 0.21. Thus, substituting the value in the equation gives the expected value of the salary that the individual must receive in order to switch the job. This can be calculated as follows:

New salary=(1−0.21)(75,000)+0.21(350,000)=0.79(75,000)+0.21(350,000)=59,250+73,500=132,750

Thus, the new salary must be equal to $132,750 per year, which means that the new salary must be higher than the existing salary by $17,150 in order to to switch the job.

Economics Concept Introduction

Opportunity cost: The opportunity cost is the next best alternative that one forgoes while making the decisions from the range of choices provided.

Answer 7

Chapter 17, Problem 1.2P

To determine

How high must be the new salary for the person to switch the job.

Answer 8

Expert Solution & Answer

Explanation of Solution

The current salary of the individual is $115,600 per year, which gives a utility of 340. Since the main concerns of the individual is the utility from the income, the individual must be offered an income that provides a utility of over 340 utils. The probability of the company's success can be calculated by setting the probability equal to 'p' as follows:

Let the probability of success be 'p'. Then the salary from the new job would be equal to the fixed salary and the probable profit that the individual can make. This can be calculated as follows:

Salary from new job=(1−p)(75,000)+p(350,000)Setting this equal to 340 we get,340=(1−p)(273.86)+p(591.61)317.75p=340−273.86p=66.14317.75=0.21

Thus, P must be equal to 0.21. Thus, substituting the value in the equation gives the expected value of the salary that the individual must receive in order to switch the job. This can be calculated as follows:

New salary=(1−0.21)(75,000)+0.21(350,000)=0.79(75,000)+0.21(350,000)=59,250+73,500=132,750

Thus, the new salary must be equal to $132,750 per year, which means that the new salary must be higher than the existing salary by $17,150 in order to to switch the job.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Opportunity cost: The opportunity cost is the next best alternative that one forgoes while making the decisions from the range of choices provided.

Answer 12

Ch. 17 - Prob. 1.2P Ch. 17 - Prob. 1.3P Ch. 17 - Prob. 1.4P Ch. 17 - Prob. 2.1P Ch. 17 - Prob. 2.2P Ch. 17 - Prob. 2.3P Ch. 17 - Prob. 2.5P Ch. 17 - Prob. 2.6P Ch. 17 - Prob. 2.7P Ch. 17 - Prob. 3.1P

How high must be the new salary for the person to switch the job.

How high must be the new salary for the person to switch the job.

Explanation of Solution

Want to see more full solutions like this?

Chapter 17 Solutions