How are resources traded in the factor markets and the distribution of factor income. Concept Introduction: Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption. Factor income refers to the income received by the factors of production for producing goods and services.

Question

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Answer 1

Question

Chapter 19, Problem aWYWL

To determine

How are resources traded in the factor markets and the distribution of factor income.

Concept Introduction:

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption.

Factor income refers to the income received by the factors of production for producing goods and services.

Expert Solution & Answer

Explanation of Solution

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption. These factors are brought to the factor market where they are traded at a price known as the factor price. Factor prices play an important role in the allocation of these resources. The factors of production determine the supply of factors in the factor market and the producers determine the demand for these factors based on their scale of operation.

Like a simple goods market, the intersection of these supply and demand curves for factors determine their factor price and their equilibrium quantity.

These factor prices are also income received by the factors for producing goods. Factor distribution of income refers to the division of total income generated in the process of production. Thus, factor prices determined by the forces of supply and demand determine the factor distribution of income.

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M” method Given the following model, solve by the method of “M”. (see image)

As indicated in the attached image, U.S. earnings for high- and low-skill workers as measured by educational attainment began diverging in the 1980s. The remaining questions in this problem set use the model for the labor market developed in class to walk through potential explanations for this trend. 1. Assume that there are just two types of workers, low- and high-skill. As a result, there are two labor markets: supply and demand for low-skill workers and supply and demand for high-skill workers. Using two carefully drawn labor-market figures, show that an increase in the demand for high skill workers can explain an increase in the relative wage of high-skill workers. 2. Using the same assumptions as in the previous question, use two carefully drawn labor-market figures to show that an increase in the supply of low-skill workers can explain an increase in the relative wage of high-skill workers.

Answer 2

Question

Chapter 19, Problem aWYWL

To determine

How are resources traded in the factor markets and the distribution of factor income.

Concept Introduction:

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption.

Factor income refers to the income received by the factors of production for producing goods and services.

Expert Solution & Answer

Explanation of Solution

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption. These factors are brought to the factor market where they are traded at a price known as the factor price. Factor prices play an important role in the allocation of these resources. The factors of production determine the supply of factors in the factor market and the producers determine the demand for these factors based on their scale of operation.

Like a simple goods market, the intersection of these supply and demand curves for factors determine their factor price and their equilibrium quantity.

These factor prices are also income received by the factors for producing goods. Factor distribution of income refers to the division of total income generated in the process of production. Thus, factor prices determined by the forces of supply and demand determine the factor distribution of income.

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Answer 3

Question

Chapter 19, Problem aWYWL

To determine

How are resources traded in the factor markets and the distribution of factor income.

Concept Introduction:

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption.

Factor income refers to the income received by the factors of production for producing goods and services.

Expert Solution & Answer

Explanation of Solution

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption. These factors are brought to the factor market where they are traded at a price known as the factor price. Factor prices play an important role in the allocation of these resources. The factors of production determine the supply of factors in the factor market and the producers determine the demand for these factors based on their scale of operation.

Like a simple goods market, the intersection of these supply and demand curves for factors determine their factor price and their equilibrium quantity.

These factor prices are also income received by the factors for producing goods. Factor distribution of income refers to the division of total income generated in the process of production. Thus, factor prices determined by the forces of supply and demand determine the factor distribution of income.

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Answer 4

Question

Chapter 19, Problem aWYWL

To determine

How are resources traded in the factor markets and the distribution of factor income.

Concept Introduction:

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption.

Factor income refers to the income received by the factors of production for producing goods and services.

Expert Solution & Answer

Explanation of Solution

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption. These factors are brought to the factor market where they are traded at a price known as the factor price. Factor prices play an important role in the allocation of these resources. The factors of production determine the supply of factors in the factor market and the producers determine the demand for these factors based on their scale of operation.

Like a simple goods market, the intersection of these supply and demand curves for factors determine their factor price and their equilibrium quantity.

These factor prices are also income received by the factors for producing goods. Factor distribution of income refers to the division of total income generated in the process of production. Thus, factor prices determined by the forces of supply and demand determine the factor distribution of income.

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Answer 5

Chapter 19, Problem aWYWL

To determine

How are resources traded in the factor markets and the distribution of factor income.

Concept Introduction:

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption.

Factor income refers to the income received by the factors of production for producing goods and services.

Expert Solution & Answer

Explanation of Solution

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption. These factors are brought to the factor market where they are traded at a price known as the factor price. Factor prices play an important role in the allocation of these resources. The factors of production determine the supply of factors in the factor market and the producers determine the demand for these factors based on their scale of operation.

Like a simple goods market, the intersection of these supply and demand curves for factors determine their factor price and their equilibrium quantity.

These factor prices are also income received by the factors for producing goods. Factor distribution of income refers to the division of total income generated in the process of production. Thus, factor prices determined by the forces of supply and demand determine the factor distribution of income.

Answer 6

Chapter 19, Problem aWYWL

To determine

How are resources traded in the factor markets and the distribution of factor income.

Concept Introduction:

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption.

Factor income refers to the income received by the factors of production for producing goods and services.

Expert Solution & Answer

Explanation of Solution

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption. These factors are brought to the factor market where they are traded at a price known as the factor price. Factor prices play an important role in the allocation of these resources. The factors of production determine the supply of factors in the factor market and the producers determine the demand for these factors based on their scale of operation.

Like a simple goods market, the intersection of these supply and demand curves for factors determine their factor price and their equilibrium quantity.

These factor prices are also income received by the factors for producing goods. Factor distribution of income refers to the division of total income generated in the process of production. Thus, factor prices determined by the forces of supply and demand determine the factor distribution of income.

Answer 7

Chapter 19, Problem aWYWL

To determine

How are resources traded in the factor markets and the distribution of factor income.

Concept Introduction:

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption.

Factor income refers to the income received by the factors of production for producing goods and services.

Answer 8

Expert Solution & Answer

Explanation of Solution

Factors refer to resources like land, labor, capital and human capital which are used in the production of goods and services meant for final consumption. These factors are brought to the factor market where they are traded at a price known as the factor price. Factor prices play an important role in the allocation of these resources. The factors of production determine the supply of factors in the factor market and the producers determine the demand for these factors based on their scale of operation.

Like a simple goods market, the intersection of these supply and demand curves for factors determine their factor price and their equilibrium quantity.

These factor prices are also income received by the factors for producing goods. Factor distribution of income refers to the division of total income generated in the process of production. Thus, factor prices determined by the forces of supply and demand determine the factor distribution of income.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 19 - Prob. aWYWL Ch. 19 - Prob. bWYWL Ch. 19 - Prob. cWYWL Ch. 19 - Prob. dWYWL Ch. 19 - Prob. 1QFT Ch. 19 - Prob. 2QFT Ch. 19 - Prob. 3QFT Ch. 19 - Prob. 1P Ch. 19 - Prob. 2P Ch. 19 - Prob. 3P

Explanation of Solution

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Chapter 19 Solutions