Question

1.Workers are compensated by firms with "benefits" in addition to wages and salaries. The most prominent benefit offered by many firms is health insurance. Suppose that in 2000, workers at one steel plant were paid $20 per hour and in addition received health benefits at the rate of $4 per hour. Also suppose that by 2010 workers at that plant were paid $21 per hour but received $9 in health insurance benefits.

a. By what percentage did total compensation (wages plus benefits) change at this plant from 2000 to 2010? Total compensation increased by ["35", "0", "25", "50"] percent.

b. By what percentage did wages change at this plant from 2000 to 2010? Wages ["unchanged", "decreased", "increased"] by ["0", "5", "25"] %. What was the approximate average annual percentage change in wages? ["1", "0.5", "5"]%

c. If workers value a dollar of health benefits as much as they value a dollar of wages, by what total percentage will they feel that their incomes have risen over this time period? ["0.5", "0", "5", "25"] What if they only consider wages when calculating their incomes? Incomes ["didn't change", "decreased", "increased"] by ["5", "25", "0"] percent.

d. Is it possible for workers to feel as though their wages are stagnating even if total compensation is rising? ["yes", "no"] A firm employs workers until the final worker's marginal Revenue Product is equal to his ["wage", "marginal profit", "output", "marginal revenue cost"]

2. A recent study by economists found that due to local and county regulations, often in the form of environmental or NIMBY-ism, the resulting number of housing builders has ["been unaffected", "shrunk", "increased"] to competition similar to that of a(n) ["monopoly", "monopolistic competitor", "oligopoly"].

The economists find this dwindling competition has ["cost the country approximately 150,000 additional homes a year", "had no effect on the housing supply", "benefited the country to the tune of approximately 150,000 additional homes a year"] — all else being equal. With ["fewer", "the constant number of", "more"] competitors, builders are under less pressure to beat out rival projects, and can time their efforts so that they produce ["fewer", "more", "a constant and equal number of"] homes while charging ["simple free market", "lower", "higher"] prices.

Suppose that a D'Lish Hamburger stand produces burgers and hires employees.  Lets suppose that the owner, Dave, makes $0.25/burger in profit not including what he pays his employees. Complete the following chart with respect to employees hired in the following order assuming that he hires all 3 and only these 3.

Curley, then Moe, then Larry.

#  Name           Burgers produced      MRP                  Wage per hour

1  Curley                    60                

  [13", "11", "12", "14", "15"]    ["11", "15", "13", "12"]

     

2  Moe                     48         

[13", "12", "15", "14"].       [12", "15", "13", "11"]

      

3  Larry                    44         

[15", "14", "11", "12", "13"]   [12", "11", "13", "15"]

Recall the Reich video & My rebuttal

A) Reich refers to the year 1968 because (as I show in my rebuttal video) ["That is the most objective year to refer to", "Its his birth year", "That was the year the MW was invented", "Its the single year in which the purchasing power of the MW was at a peak"]

B) I explain that the productivity claim is fallacious as most productivity has

["Come due to better laborers", "come in the fast food industry", "come in higher wage fields", "come in low wage fields" and that it is often due to ["a loss of capital", "more capital purchased y the employers", "better workers due to more education", "better educated/degree workers"]

thanks

Answer 1

Answer:

1)

(a) Compensation in 2000 was $24 per hour, since a worker who works one hour will be paid $20 in wage and $4 in health benefits. In 2010, the compensation was $30 per hour, since a worker will be paid $21 in wage and $9 in health benefits per hour. Thus, the increase $30-$24 from $24 to $30 is an increase of $24 , $6 $24 or 25%. Hence, on average, that is approximately a 2.5% increase per year over ten years.

(b) To find out the percentage change in wages in the plant from 2000 to 2010, we simply take the wage in 2010, subtract that by the wage in 2000, and dividing the difference by the wage in 2000. Since in 2000, the wage is $20 and in 2010, the wage is $21, we have: $21-$20 S1 $20 $20 = 0.05 Hence, the growth in wage is 0.05 x 100%, or 5%. On average then, the increase in wage per year is 5% divided by 10 years, which is 0.5% per year.

(C) If workers saw the health benefit to be of equal value to wage, then we see that the workers will look at the total compensation as their income. Therefore, as calculated already in part (a), the workers will feel that their income has increased by 25% over the ten years. However, if they only consider their wages to be their income, then they would feel that their income have only gone up by 5% in the ten years, as calculated in part (b).

(d) Yes, workers may feel like their wages are stagnating even when total compensation is increasing because an increase in health benefits may not be completely felt by the worker. A worker who do not need the health benefits may see that their wage has only gone up by $1 more per hour in ten years, so they may feel like their wages are stagnating. However, a worker may value the health benefits that the firm provides highly, and if so, they will feel as if their income has gone up by quite a bit over the last ten years since we will then include the increase in health benefits).

A recent study by economists found that due to local and county regulations, often in the form of environmental or NIMBY-ism, the resulting number of housing builders has "shrunk" to competition similar to that of "oligopoly".

MRP=wage 1)curley =60*. 25 =15Mrp, wages 15 2)Moe=48*.25 =12, wages 12 3)larry=44*.25 =11,wages 11