MICROECONOMICS-ACCESS CARD <CUSTOM>
11th Edition
ISBN: 9781266285097
Author: Colander
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 3IP
(a)
To determine
The argument for working instead of studying.
(b)
To determine
Check whether the trade-off between working and grade points are reasonable.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
(Based on Chapter 2, Problem 1 of Benjamin et al., 2031) Amit has $2000 of annual non-labour income.
He has 80 hours per week that he can allocate between labour and leisure, for 80 x 52 = 4160 hours per
year. His current wage rate is $20 per hour and he chooses to work 2200 hours a year. (a) Draw a leisure -
labour diagram, clearly indicating Amit's current labour supply decision. (Your diagram should be clearly
labeled and include Amit's budget line and an indifferent curve showing his leisure and consumption of
goods and services at his optimal choice. Use the figures provided to find the y-intercept and his
consumption if he doesn't work.) (b) Amit's wage rate increases to $25 per hour. In response, he increases
his labour supply to 2300 hours. If he were "compensated" accordingly, at this new wage rate he would
be just indifferent to working 2200 hours at his original wage rate and working 2400 hours at the new
wage. Illustrate Amit's new optimal choice. Use the information…
Use the grey quadrilateral (star symbols) to shade the area representing the direct costs of attending college for four years. Then use the purple
quadrilateral (diamond symbols) to shade the area representing the opportunity cost of attending college for four years rather than entering the work
force immediately after completing high school. Finally, use the green quadrilateral (triangle symbols) to shade the area representing the difference in
earnings between college graduates and high school graduates between the ages of 22 and 34.
Hint: Be sure that the coordinates of the end points of the quadrilaterals are exactly the same as the coordinates of the areas they are to cover. Once
the quadrilateral is in place, click on it to show the value of the shaded area.
EARNINGS AND COST (Thousands of dollars)
100
80
60
College
Direct Costs
High School
20
Opportunity Cost
-20
-40
-60
-80
-100-
18
20
22
24
26
28
30
32
34
AGE (Years)
Benefits
The previous graph shows that the benefit in…
A carpenter quits his job at a furniture factory to open his own cabinetmaking business. In his first two years of operation, his sales average $100 000 per year and his operating costs for wood, workshop and tool rental, utilities, and miscellaneous expenses average $70 000 per year. Now his old job at the furniture factory is again available. What is the lowest wage at which he should decide to return to his old job? Why?
Chapter 2 Solutions
MICROECONOMICS-ACCESS CARD <CUSTOM>
Ch. 2.1 - Prob. 1QCh. 2.1 - Prob. 2QCh. 2.1 - Prob. 3QCh. 2.1 - Prob. 4QCh. 2.1 - Prob. 5QCh. 2.1 - Prob. 6QCh. 2.1 - Prob. 7QCh. 2.1 - Prob. 8QCh. 2.1 - Prob. 9QCh. 2.1 - Prob. 10Q
Ch. 2.A - Prob. 1QECh. 2.A - Prob. 2QECh. 2.A - Prob. 3QECh. 2.A - Prob. 4QECh. 2.A - Prob. 5QECh. 2.A - Prob. 6QECh. 2.A - Prob. 7QECh. 2.A - Prob. 8QECh. 2 - Prob. 1QECh. 2 - Prob. 2QECh. 2 - Prob. 3QECh. 2 - Prob. 4QECh. 2 - Prob. 5QECh. 2 - Prob. 6QECh. 2 - Prob. 7QECh. 2 - Prob. 8QECh. 2 - Prob. 9QECh. 2 - Prob. 10QECh. 2 - Prob. 11QECh. 2 - Prob. 12QECh. 2 - Prob. 1QAPCh. 2 - Prob. 2QAPCh. 2 - Prob. 3QAPCh. 2 - Prob. 4QAPCh. 2 - Prob. 5QAPCh. 2 - Prob. 1IPCh. 2 - Prob. 2IPCh. 2 - Prob. 3IPCh. 2 - Prob. 4IPCh. 2 - Prob. 5IPCh. 2 - Prob. 6IP
Knowledge Booster
Similar questions
- please draw a graph and do as the problem says. please answer both questions.arrow_forward2a 2barrow_forwardSuppose the following graph shows the earnings trajectory of college-educated workers (orange line) and of workers with only a high school diploma (blue line), through age 34. Use the grey quadrilateral (star symbols) to shade the area representing the direct costs of attending college for four years. Then use the purple quadrilateral (diamond symbols) to shade the area representing the opportunity cost of attending college for four years rather than entering the work force immediately after completing high school. Finally, use the green quadrilateral (triangle symbols) to shade the area representing the difference in earnings between college graduates and high school graduates between the ages of 22 and 34. Hint: Be sure that the coordinates of the end points of the quadrilaterals are exactly the same as the coordinates of the areas they are to cover. Once the quadrilateral is in place, dick on it to show the value of the shaded area. ? 100 8 8 8 8 EARNINGS AND COST (Thousands of…arrow_forward
- How does a human capital investment in education increase your lifetime earning?arrow_forwardWhen would you see the greatest gain if there is a compensating differential built into your salary? The differential is for a negative risk that you care about more than most people do. The differential is for a large negative risk that you don't care about as much as most people do. The differential is for a positive job aspect that you don't care about as much as most people do. The differential is for a slightly positive job aspect that you care about more than most people do.arrow_forwardProductivity may not account for all of the wage disparities and growing income inequality in the United States. Discrimination, education, globalization, and legislation are all factors that can have an impact. The salary disparity between CEOs and average workers is also significant. Productivity is an important factor in labor-market wage disparities, but it is not the only one. Tax policies that favor the wealthy, as well as a decline in unionization, can both lead to rising income disparity. Changes in skilled labor demand, globalization, technology, and government policy can all contribute to the United States' expanding wealth gaps.arrow_forward
- Marie is about to choose a career path. She can either become a certified public accountant or a high school teacher. Marie lives two periods. In the first, she gets an education. In the second, she works in the labor market. If Marie becomes a certified public accountant, she will spend $45,000 on education in the first period and earn $500,000 in the second period. If she becomes a high school teacher, she will spend $30,000 on education in the first period and then earn $400,000 in the second period. Suppose Marie can lend and borrow money at a 5 percent rate of interest between the two periods. a) Which career will she pursue? b) What if she can lend and borrow money at a 15 percent rate of interest?arrow_forwardBrad Edwards is earning $36,000 a year in a city located in the Midwest. He is interviewing for a position in a city with a cost of living 18 percent higher than where he currently lives. What is the minimum salary Brad would need at his new job to maintain the same standard of living?arrow_forwardHow does age impact on job mobility? Explain in shortarrow_forward
- Below are three examples of an individual experiencing a wage change at various points in their career: i) After five years of working with their current employer, the individual received a scheduled increase in their hourly wage. ii) In celebration of the firm's 50th anniversary, the individual's employer increased the hourly wage of all employees for the month of February. iii) After a particularly profitable year, the individual's employer increased the hourly wage of all employees. Assume that each wage change generated the same sized substitution effect. Which of the three wage changes do we expect will least motivate the individual to increase their hours worked? Explain.arrow_forwardwhy in her calculation of the cost of going to college, an economist would include the amount of forgone earnings over the years spent at college?arrow_forwardSuppose that education is the only factor that affects productivity and that an additional year of education raises wages by 2%. Suppose in 2011 gender wage gap was 13%, and the average man had 15 years of education while the average women had 14 years of schooling. a) Using the wage gap decomposition technique, calculate how much of the 13% wage differential is due to discrimination? b) Now suppose in 2021 the gender wage gap is 10%, but the average woman’s education level is increased to 17 year and the average man’s education increases to16 years. (Assume that the return to education stays same at 2%), Was there a decrease or an increase in wage discrimination in the decade? Why?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning