LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 4P
To determine
Determine the wage in dirty jobs and the amount of compensating wage differential.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A medical researcher is trying to cure a disease. For each unit of effort she puts into her work, she generates a utility benefit of 10 for each member of society. There are 1,000 people in society besides the medical researcher. The medical researcher doesn’t care about other people. She is in it for the glory. For each unit of effort she puts into her work, she gets a utility benefit of 1000 (which is inclusive of the 10 that she gets for being a member of society, plus a payoff of 990 in glory). If she exerts effort e, she also suffers cost e^2.
(a) Suppose a policymaker who was a committed utilitarian (including caring about the medical researcher’s glory, since the medical researcher cares about it) was to choose the level of effort the medical researcher exerts. That policymaker would add up the total utility in society (including the medical researcher’s utility) from any given level of effort and choose the level of effort that maximizes that aggregate utility.
i. What (social)…
Two fish farmers are deciding how many fish to raise in a public access lake. The problem is that this lake is quite small and the oxygen and food needed for aquaculture is They quickly deplete if there are excess fish, thus reducing production. Let ya and yb the number of fish that each farmer raises. The unit value of each farmed fish is: V(ya, yb) = 200 − (ya + yb)2
(b) Find the private equilibrium of fish farming. Get the benefits of each aquaculturist and the added benefits.
A recent trend in health insurance is the Health Savings Account (HSA). The idea behind Health Savings Accounts is that rather than providing employees with health insurance that makes visiting doctors cost little more than a simple $10 or $20 copay the employer gives the employee money to use to spend on health care, but the employee bares the entire cost of seeing the doctor. What money given for health care not spent by the employee can be withdrawn by the employee as if it was additional income.
It is believed that Health Savings Accounts will reduce the total amount of money spent on seeing doctors. Using Supply and Demand analysis, explain why there is the expectation that HSA’s will reduce spending on doctors.
Knowledge Booster
Similar questions
- Suppose that a surfboard designer owns a building and is renting part of the building's space to a doctor. Further suppose that because the surfboard designer is the owner, he has the right to make noise during the day while he sands the boards. While the doctor cannot insist on a quiet environment, the doctor could move to a quieter building. However, rent in the next best building is $400/month more than rent in the noisy building. The surfboard designer can adopt a new technology that eliminates the noise for $325/month. Given this situation, can the doctor find a private solution with the surfboard designer that will make both better off? What is the minimum and maximum payment the doctor would make to the surfboard designer to get the doctor to install the noise-reducing equipment? NOTE: Round your answers to the nearest dollar. Minimum: $ Maximum: $arrow_forwardThere is a road between the suburbs and downtown. The road is congested at rush hour. If 172 people use the road at rush hour, the trip takes 38 minutes. If one additional person enters the road, everyone has to slow down and the trip now takes 39 minutes. People value their time at $6 per hour (that is, 50.10 per minute). For simplicity, ignore all of the costs of using the road other than the cost of time. The total social cost of 172 people using the road at rush hour is S1 (Round your response to the nearest dollar.) The marginal social cost of onea additional person is S (Round your response to the nearest dollar.) The efficient toll on this one additional person (that is, the cost he imposes on other drivers) is S (Round your response to the nearest dollar.) Suppose at noon 50 people are using the road. The road is not congested and the trip takes just 20 minutes. If one additional driver enters the road, no one has to slow down and the trip continues to take 20 minutes. The toll…arrow_forwardSuppose five people have houses on the same small lane. They all individually benefit from regular maintenance of the lane. Their individual marginal benefit curves are P = 8 ― (1/10)Q, where P reflects a willingness to pay in thousands and Q is the length of the road repaired in ten-yard units. The cost of maintenance is $2,000 per ten yards. Suppose one person is currently the only one paying for maintenance. How much does this person buy, and what is the deadweight loss? Does anyone individually have an incentive to pay for additional maintenance, and why or why not?arrow_forward
- Let: U1 = x1 + z^.5, Y1 = x1 + pz1 %3| %3D U2 = x2 - .5z^.5, Y2 = x2 + pz2 %3D z = z1 + z2, Y is the income of the agent, and p is the price of z1 and z2. What is the social-optimal amount of z1 and z2? What is the optimal amount of z1 agent 1 would choose given z2, and vice versa? What can the social planner do so that the agents choose the socially optimal level of z1 and z2? How much is needed to achieve the social-optimal amount?arrow_forwardDo not use Ai.arrow_forwardYou have the option to play tennis or a round of golf (but not both). The tennis match requires you to take 2 hours off from work and the round of golf requires you to take 4 hours off from work. Playing tennis has value to you equal to $70, while golf has value to you equal to $105. Tennis courts are publicly available at no cost, but golf costs $20 per round. Suppose your wage from working is $12 per hour. Part 2 The net benefit from playing tennis is $ enter your response here and the net benefit from playing golf is $ enter your response here. (Enter your responses as integers.)arrow_forward
- People tend to view car travel as being safer than airplane travel, but a person is how many times more likely to die from a car accident than from an airplane crash?arrow_forwardMalaria Eradication Back on the Table In response to the Gates Malaria Forum in October 2007, countries are debating the pros and cons of eradication. Dr. Arata Kochi of the World Health Organization believes that with enough money malaria cases could be cut by 90 percent, but it would be very expensive to eliminate the remaining 10 percent of cases, so countries should not strive to eradicate malaria. Make a graph with the percentage of malaria cases eliminated on the x -axis and the marginal cost and marginal benefit of driving down malaria cases on the y -axis. On your graph: (i) Draw a marginal cost curve and marginal benefit curve that are consistent with Dr. Kochi’s opinion. (ii) Identify the quantity of malaria eradicated that achieves allocative efficiency.arrow_forwardBecky and Sarah are sisters who share a room. Their room can easily get messy, and their parents are always telling them to tidy it. Here are the costs and benefits to both Becky and Sarah, of taking the time to clean their room: If both Becky and Sarah clean, they each spends two hours and get a clean room. If Becky decides not to clean and Sarah does all the cleaning, then Sarah spends 10 hours cleaning (Becky spends 0) but Sarah is exhausted. The same would occur for Becky if Sarah decided not to clean—Becky spends 10 hours and becomes exhausted. If both girls decide not to clean, they both have a dirty room. a. What is the best outcome for Becky and Sarah? What is the worst outcome? (It would help you to construct a prisoner’s dilemma table.) b. Unfortunately, we know that the optimal outcome will most likely not happen, and that the sisters probably will choose the worst one instead. Explain what it is about Becky’s and Sarah’s reasoning that will lead them both to choose the…arrow_forward
- please provide detailed explanation. Thank you very much!arrow_forwardThelma owns a cat which wakes up her roommate Louise at 6am every morning. Thelma enjoys cat ownership, but Louise bears a cost of Thelma's ownership of the cat. Assuming that Louise has the legal right to sleep as long as she likes, which action is necessary? if Thelma's benefit exceeds Louise's cost, government intervention is necessary if Louise's cost exceeds Thelma 's benefit, Thelma will pay Louise to keep her cat Thelma will pay Louise to be able to keep the cat if her benefit exceeds Louise's cost if Louise has the legal right to sleep, she only has to pay Thelma when her cost is below Thelma's benefitarrow_forwardJulie complains about the extremenoise in the factory. This is one of hygiene factors according to Herzberg Theory. True False Neither of the choices Either of the choicesarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Macroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author: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
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher: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
Macroeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506756
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