Homework Answers
When Government subsidizes education, quality of free education rises and help in GDP growth as well as skilledlabor participation rises.
However signalling value will decrease as competition rises for similar qualifications whhich can devalue and downgrade the quality of education and as its accessibility and reach increases competition also increases making less quality education redundant.
High quality and low quality workers thus will be realised by new paradigm of evaluation of workers using multiple rounds of interviews, case studies, role plaus, tests, etc and thus higher stringent talent acquisition process.
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5. The Spence signalling model assumes that the costs of acquiring education are higher for low-...
(12 points) Suppose there are two types of people: high-ability and low-ability. The schooling required to...
(12 points) Suppose there are two types of people: high-ability and low-ability. The schooling required to obtain a particular diploma costs a high-ability person $8,000 per year, and it costs a low-ability person $10,001 per year. Firms wish to use this diploma as a signal of an individual’s ability. The firms intend to pay workers such that the present value of lifetime earnings for a worker without the diploma is $250,000, and the present value of lifetime earnings for a...
Spence's original education signaling model has been criticized on the grounds that the presence or absence...
Spence's original education signaling model has been criticized on the grounds that the presence or absence of a college degree is a relatively weak signal in today's job market. That is, although the wage gap between those with and without degrees remains large, there appears to be considerable "pooling” of different levels of talent, ability, determination, work ethic, etc., within the group of college graduates. Consider a variation in the model in which firms use grade-point average (GPA) as the...
Question 1 1. (10 marks) Suppose that schooling (s) is the only variable that affects earnings....
Question 1 1. (10 marks) Suppose that schooling (s) is the only variable that affects earnings. The following equations describe the weekly salaries of tall and short workers: Wtall = 700 + 100s Wshort = 400 + 80s On average, tall workers have 15 years of schooling and short workers have 12 years of schooling. a) (4 marks) What is the short-tall wage differential in the labour market? b) (6 marks) Use the Oaxaca decomposition approach to calculate how much...
PLEASE EXPLAIN YOUR ANSWERS. THANK YOU! If education produces positive externalities and the government does not intervene in the market, we would expect O the equilibrium price to be higher than...
PLEASE EXPLAIN YOUR ANSWERS. THANK YOU!
If education produces positive externalities and the government does not intervene in the market, we would expect O the equilibrium price to be higher than the optimal price. b. the equilibrium quantity to be lower than the optimal level. c.the equilibrium quantity to be higher than the optimal level. d. both a and b are correct Tradable pollution permits a. have prices that are set by the government. b. will be more valuable to...
9. Applying the extended AD-AS model Financial crises, such as the one that impacted many developed...
9. Applying the extended AD-AS model
Financial crises, such as the one that impacted many developed
countries starting in 2007, decrease banks’ ability and willingness
to make loans. Decreased availability of credit decreases
businesses’ ability to make investment purchases and consumers’
ability to buy goods and services. As a result, a financial crisis
is a negative shock for an economy.
The following graph shows an economy’s aggregate demand curve
and its short-run and long-run aggregate supply curves after a
financial...
Problem 6 Due to the collapse of the housing bubble in 2007-2008 there was a financial...
Problem 6 Due to the collapse of the housing bubble in 2007-2008 there was a financial crisis that led to rampant unemployment. Draw a best resonse curve (BRC) for each of the following years and explain what it illustrates 1. the pre-crisis period (2006) 2. the crisis years (20078) 3. the post-crisis year (2009) Your diagram should show that firms would be able to lower costs during the crisis by offer ing a lower wage however, there is empirical evidence...
C Date: Class (First Pagr) Date: Class (Subsrquent Pagrs) If you are risk avene a. You value a lo...
c Date: Class (First Pagr) Date: Class (Subsrquent Pagrs) If you are risk avene a. You value a lohery a moee than is expected value. b You ike to uke gambles. c. A loaery is worth kess to you than iks expected vaue d You advertise your anihude twward risk. When farmers sell forward contracts in spring for the harvest they will reap in Autumn a. Their planting decisions are riskier due to increased uncertainy b They accrpt a price...
CASE STUDY FOR CHAPTER 7 Worker Productivity among Giant U.S. Corporations Traditional measures of firm productivity...
CASE STUDY FOR CHAPTER 7 Worker Productivity among Giant U.S. Corporations Traditional measures of firm productivity tend to focus on profit margins, the rate of return on stockholder’s equity, or related measures like total asset turnover, inventory turnover, or receivables turnover. Profit margin is net income divided by sales and is a useful measure of a company’s ability to manufacture and distribute distinctive products. When profit margins are high, it is a good sign that customer purchase decisions are being...
Structural unemployment is caused by changing patterns of labor demand. real wages being inflexible downward. high...
Structural unemployment is caused by changing patterns of labor demand. real wages being inflexible downward. high costs of occupational and/or geographic adjustment. All of these 2.5 points QUESTION 13 Suppose an employment contract includes a no-quit clause. How does the answer to the question “Who pays for general training?” depend on the no-quit clause? Workers pay for their general training with or without the no-quit clause With the no-quit clause, the firm can pay for general training With the...
Activity-Based Costing, Distorted Product Costs Sharp Paper Inc. has three paper mills, one of which is...
Activity-Based Costing, Distorted Product Costs Sharp Paper Inc. has three paper mills, one of which is located in Memphis, Tennessee. The Memphis mill produces 300 different types of coated and uncoated specialty printing papers. Management was convinced that the value of the large variety of products more than offset the extra costs of the increased complexity. During 20X1, the Memphis mill produced 120,000 tons of coated paper and 80,000 tons of uncoated paper. Of the 200,000 tons produced, 180,000 were...
Spence's original education signaling model has been criticized on the grounds that the presence or absence of a college degree is a relatively weak signal in today's job market. That is, although the wage gap between those with and without degrees remains large, there appears to be considerable "pooling” of different levels of talent, ability, determination, work ethic, etc., within the group of college graduates. Consider a variation in the model in which firms use grade-point average (GPA) as the...
PLEASE EXPLAIN YOUR ANSWERS. THANK YOU!
If education produces positive externalities and the government does not intervene in the market, we would expect O the equilibrium price to be higher than the optimal price. b. the equilibrium quantity to be lower than the optimal level. c.the equilibrium quantity to be higher than the optimal level. d. both a and b are correct Tradable pollution permits a. have prices that are set by the government. b. will be more valuable to...
9. Applying the extended AD-AS model
Financial crises, such as the one that impacted many developed
countries starting in 2007, decrease banks’ ability and willingness
to make loans. Decreased availability of credit decreases
businesses’ ability to make investment purchases and consumers’
ability to buy goods and services. As a result, a financial crisis
is a negative shock for an economy.
The following graph shows an economy’s aggregate demand curve
and its short-run and long-run aggregate supply curves after a
financial...
Problem 6 Due to the collapse of the housing bubble in 2007-2008 there was a financial crisis that led to rampant unemployment. Draw a best resonse curve (BRC) for each of the following years and explain what it illustrates 1. the pre-crisis period (2006) 2. the crisis years (20078) 3. the post-crisis year (2009) Your diagram should show that firms would be able to lower costs during the crisis by offer ing a lower wage however, there is empirical evidence...
c Date: Class (First Pagr) Date: Class (Subsrquent Pagrs) If you are risk avene a. You value a lohery a moee than is expected value. b You ike to uke gambles. c. A loaery is worth kess to you than iks expected vaue d You advertise your anihude twward risk. When farmers sell forward contracts in spring for the harvest they will reap in Autumn a. Their planting decisions are riskier due to increased uncertainy b They accrpt a price...
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