Determine how the workers who wish to maximize the present value of lifetime earnings calculate the net gains to migration.

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Answer 1

Question

Chapter 8, Problem 1RQ

To determine

Determine how the workers who wish to maximize the present value of lifetime earnings calculate the net gains to migration.

Expert Solution & Answer

Explanation of Solution

According to the trend, employees calculate the value of employment opportunities available in the each of the alternative destinations and subtract the cost of moving from the origin to the destination. They then determine which option maximizes the net present value of lifetime earnings. This means that if the net gain to migration is positive, then the workers will move to another destination to maximize the present value of lifetime earnings. Here, improving the economic opportunities available in the destination will increase the net gains from migration and increases the likelihood that the worker will migrate. On the other hand, improving economic opportunities in the current region of residence decreases the net gain from the migration and decreases the worker’s probability of moving. In addition, an increase in migration costs reduces the net gains and decreases the probability of switch.

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The accompanying graph shows the short-run demand and cost situation for a price searcher in a market with low barriers to entry. Price (dollars) 24 8 MC ATC MR 30 D 45 50 Quantity/time The firm will maximize its profit at a quantity of units. After choosing the profit maximizing quantity, the firm will charge a price of The firm will receive $ in revenue at the profit-maximizing quantity. The total cost of production for this profit-maximizing quantity is S The maximum profit the firm can earn in this situation is $ per unit for this output. How will the situation change over time? Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost. ◇ Losses will induce firms to leave this market until the profit maximizing price falls to zero. The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity. This market is already in long-run equilibrium, and will not…

Answer 2

Question

Chapter 8, Problem 1RQ

To determine

Determine how the workers who wish to maximize the present value of lifetime earnings calculate the net gains to migration.

Expert Solution & Answer

Explanation of Solution

According to the trend, employees calculate the value of employment opportunities available in the each of the alternative destinations and subtract the cost of moving from the origin to the destination. They then determine which option maximizes the net present value of lifetime earnings. This means that if the net gain to migration is positive, then the workers will move to another destination to maximize the present value of lifetime earnings. Here, improving the economic opportunities available in the destination will increase the net gains from migration and increases the likelihood that the worker will migrate. On the other hand, improving economic opportunities in the current region of residence decreases the net gain from the migration and decreases the worker’s probability of moving. In addition, an increase in migration costs reduces the net gains and decreases the probability of switch.

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Answer 3

Question

Chapter 8, Problem 1RQ

To determine

Determine how the workers who wish to maximize the present value of lifetime earnings calculate the net gains to migration.

Expert Solution & Answer

Explanation of Solution

According to the trend, employees calculate the value of employment opportunities available in the each of the alternative destinations and subtract the cost of moving from the origin to the destination. They then determine which option maximizes the net present value of lifetime earnings. This means that if the net gain to migration is positive, then the workers will move to another destination to maximize the present value of lifetime earnings. Here, improving the economic opportunities available in the destination will increase the net gains from migration and increases the likelihood that the worker will migrate. On the other hand, improving economic opportunities in the current region of residence decreases the net gain from the migration and decreases the worker’s probability of moving. In addition, an increase in migration costs reduces the net gains and decreases the probability of switch.

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Answer 4

Question

Chapter 8, Problem 1RQ

To determine

Determine how the workers who wish to maximize the present value of lifetime earnings calculate the net gains to migration.

Expert Solution & Answer

Explanation of Solution

According to the trend, employees calculate the value of employment opportunities available in the each of the alternative destinations and subtract the cost of moving from the origin to the destination. They then determine which option maximizes the net present value of lifetime earnings. This means that if the net gain to migration is positive, then the workers will move to another destination to maximize the present value of lifetime earnings. Here, improving the economic opportunities available in the destination will increase the net gains from migration and increases the likelihood that the worker will migrate. On the other hand, improving economic opportunities in the current region of residence decreases the net gain from the migration and decreases the worker’s probability of moving. In addition, an increase in migration costs reduces the net gains and decreases the probability of switch.

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Answer 5

Chapter 8, Problem 1RQ

To determine

Determine how the workers who wish to maximize the present value of lifetime earnings calculate the net gains to migration.

Expert Solution & Answer

Explanation of Solution

According to the trend, employees calculate the value of employment opportunities available in the each of the alternative destinations and subtract the cost of moving from the origin to the destination. They then determine which option maximizes the net present value of lifetime earnings. This means that if the net gain to migration is positive, then the workers will move to another destination to maximize the present value of lifetime earnings. Here, improving the economic opportunities available in the destination will increase the net gains from migration and increases the likelihood that the worker will migrate. On the other hand, improving economic opportunities in the current region of residence decreases the net gain from the migration and decreases the worker’s probability of moving. In addition, an increase in migration costs reduces the net gains and decreases the probability of switch.

Answer 6

Chapter 8, Problem 1RQ

To determine

Determine how the workers who wish to maximize the present value of lifetime earnings calculate the net gains to migration.

Expert Solution & Answer

Explanation of Solution

According to the trend, employees calculate the value of employment opportunities available in the each of the alternative destinations and subtract the cost of moving from the origin to the destination. They then determine which option maximizes the net present value of lifetime earnings. This means that if the net gain to migration is positive, then the workers will move to another destination to maximize the present value of lifetime earnings. Here, improving the economic opportunities available in the destination will increase the net gains from migration and increases the likelihood that the worker will migrate. On the other hand, improving economic opportunities in the current region of residence decreases the net gain from the migration and decreases the worker’s probability of moving. In addition, an increase in migration costs reduces the net gains and decreases the probability of switch.

Answer 7

Chapter 8, Problem 1RQ

To determine

Determine how the workers who wish to maximize the present value of lifetime earnings calculate the net gains to migration.

Answer 8

Expert Solution & Answer

Explanation of Solution

According to the trend, employees calculate the value of employment opportunities available in the each of the alternative destinations and subtract the cost of moving from the origin to the destination. They then determine which option maximizes the net present value of lifetime earnings. This means that if the net gain to migration is positive, then the workers will move to another destination to maximize the present value of lifetime earnings. Here, improving the economic opportunities available in the destination will increase the net gains from migration and increases the likelihood that the worker will migrate. On the other hand, improving economic opportunities in the current region of residence decreases the net gain from the migration and decreases the worker’s probability of moving. In addition, an increase in migration costs reduces the net gains and decreases the probability of switch.