3. (12 points) There are two types of workers: low ability L and high ability H....
3. (12 points) There are two types of workers: low ability L and high ability H. The cost of obtaining a college degree is 40 for a type L worker and 20 for a type H worker. Suppose that the wage is 60 for workers without a college degree and w for workers with a college degree.
(a) What is the highest value of w for which type L workers do not obtain a college degree?
(b) What is the lowest value of w for which type H workers obtain a college degree?
4. (12 points) An economist seeks to calculate a differences-in-differences estimate for the effect of a training program on earnings. Workers are randomly assigned to a treatment group and a control group. Workers in the treatment group receive training, but workers in the control group do not. The training program takes place in 2005. The average wage of workers in the control group is 100 in 2004 and 200 in 2006. The average wage of workers in the treatment group is 110 in 2004 and 290 in 2006.
(a) What is the increase in the average wage for the control group between 2004 and 2006? What is the increase in the average wage for the treatment group between 2004 and 2006?
(b) What is the increase in the average wage for the treatment group minus the increase in the average wage for the control group?
Homework Answers
3) There are 2 types of workers : low ability L and high ability H.
Cost of obtaining a college degree is 40 for L and 20 for H.
Wage of L is 60 and wage of H 'w'.
wage of a worker represent the benefit received from obtaining a college degree,
net benefit = total benefit - total cost
net benefit for L = 60-40
= 20
net benefit for H= w- 20
a) what is the highest value of w for which type L workers do not obtain a college degree?
L workers wont obtain a college degree if the net benefits received without a college degree exceeds net benefits received after a college degree.
converting the above statement into equation form.
20>w-20
40>w
therefore if wage is greater than
therefore if wage of H, 'w' > 40 : L workers want to obtain a college degree
'w' = 40 : L workers would be indifferent.
'w'<40 : L workers do not want to obtain a college degree.
so highest value of w for which type L workers do not obtain a college degree is 39.
b) What is the lowest value of w for which type H workers obtain a college degree?
H workers would obtain a college degree if the net benefits received with a college degree exceeds net benefits received without a college degree.
converting the above statement into equation form.
w-20>20
w>40
therefore if wage, 'w' > 40 : H workers want to obtain a college degree
'w' = 40 : H workers would be indifferent.
'w'<40 : H workers do not want to obtain a college degree.
so lowest value of w for which type H workers want to obtain a college degree is 41.
Add Answer to:
3. (12 points) There are two types of workers: low ability L and
high ability H....
(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...
Assume that there are two types of workers in a perfectly competitive labour marker: type H...
Assume that there are two types of workers in a perfectly competitive labour marker: type H is the high ability worker with lifetime productivity of $550,000 and type L is the low ability worker with lifetime productivity of $370,000. Suppose 60 percent of the workers are type H and 40 percent are type L. Both types already have 9 years of schooling. Also, further education can be used as a signal for productivity in the labour market. In this case,...
4. (6 points) Suppose there are two types of persons: high-ability and low-ability. A particular diploma...
4. (6 points) Suppose there are two types of persons: high-ability and low-ability. A particular diploma costs a high-ability person $30,000 and costs a low-ability person $40,000. Firms wish to use education as a screening device where they intend to pay $60,000 to workers without a diploma and SK to those with a diploma. In what range must K be to make this an effective screening device?
6. Suppose there are two types of restaurant workers — high-skill chefs and low-skill servers. There...
6. Suppose there are two types of restaurant workers — high-skill chefs and low-skill servers. There are 1000 males and 1000 females in the labour force, and each group has an identical distribution between high- skill and low-skill workers. The two diagrams below show an initial outcome in each labour market. Assume there is no discrimination based on gender. a) As shown in the figures, the wage paid to chefs is higher than the wage paid to servers. What explains...
1. Which of the following programs is superior in terms of its ability to direct payments...
1. Which of the following programs is superior in terms of its ability to direct payments to those individuals or families in greatest need of assistance? A.Social assistance or welfare B.Unemployment insurance C.Canada Pension Plan D.None of the above choices are correct. 2. The difference between a conventional welfare program and a negative income tax program is that: A.Recipients of the negative income tax program will receive higher levels of total income than they would under conventional social assistance. B.For...
Multiple choice 1. Which of the following programs is superior in terms of its ability to...
Multiple choice 1. Which of the following programs is superior in terms of its ability to direct payments to those individuals or families in greatest need of assistance? A.Social assistance or welfare B.Unemployment insurance C.Canada Pension Plan D.None of the above choices are correct. 2. The difference between a conventional welfare program and a negative income tax program is that: A.Recipients of the negative income tax program will receive higher levels of total income than they would under conventional social...
Suppose you work for the Immigration and Naturalization Service (INS) and are responsible to access the...
Suppose you work for the Immigration and Naturalization Service (INS) and are responsible to access the potential impact of an increase in immigration on the domestic labor market. Since you’re a trained labor economist you’ve correctly identified that you have a market for domestic assembly plant workers parameterized by the labor supply and demand equations LSD=?30+6Wand LD=170?2W where W = an hourly wage and L = 100’s of workers. You also know that the migrating workers will have a labor...
just answer e,f,g,h,i,j. (a) (3 points) To begin, assume that a firm is producing using q...
just answer e,f,g,h,i,j.
(a) (3 points) To begin, assume that a firm is producing using q = h(K, L) = K(1/3) L (1/3). Suppose the firm currently owns 128 machines, the price of the good is P = $96, the rental rate of capital is r = $4, and the wage rate is w = $16. What level of Labour would be hired? How much would be produced? Would the firm make a profit or a loss? Suppose there are...
QUESTION 1 1 points Let L represent the number of workers hired by a firm, and...
QUESTION 1 1 points Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (1.8,Q-97) and (L·9,Qo1433. Then the marginal product of h worker is a 46 units of output. b. 143 units of output c1 unit of output. d. 59 units of output. 1 points QUESTION 2 Table t Bob's Bulldozers Cost Table Quantity able Margina erage age Average otal...
Ethically, health-care providers should refuse all patients that do not have the ability to pay. refuse...
Ethically, health-care providers should refuse all patients that do not have the ability to pay. refuse patients when the practice is already oversubscribed. only refuse patients when the provider has announced his or her retirement. refer all low-income patients to a charitable organization instead of providing any health care to these patients. It is never acceptable to withhold information from patients for fear they will refuse treatment. True False Knowledge that, if revealed, would harm not only the client but...
Assume that there are two types of workers in a perfectly competitive labour marker: type H is the high ability worker with lifetime productivity of $550,000 and type L is the low ability worker with lifetime productivity of $370,000. Suppose 60 percent of the workers are type H and 40 percent are type L. Both types already have 9 years of schooling. Also, further education can be used as a signal for productivity in the labour market. In this case,...
4. (6 points) Suppose there are two types of persons: high-ability and low-ability. A particular diploma costs a high-ability person $30,000 and costs a low-ability person $40,000. Firms wish to use education as a screening device where they intend to pay $60,000 to workers without a diploma and SK to those with a diploma. In what range must K be to make this an effective screening device?
6. Suppose there are two types of restaurant workers — high-skill chefs and low-skill servers. There are 1000 males and 1000 females in the labour force, and each group has an identical distribution between high- skill and low-skill workers. The two diagrams below show an initial outcome in each labour market. Assume there is no discrimination based on gender. a) As shown in the figures, the wage paid to chefs is higher than the wage paid to servers. What explains...
just answer e,f,g,h,i,j.
(a) (3 points) To begin, assume that a firm is producing using q = h(K, L) = K(1/3) L (1/3). Suppose the firm currently owns 128 machines, the price of the good is P = $96, the rental rate of capital is r = $4, and the wage rate is w = $16. What level of Labour would be hired? How much would be produced? Would the firm make a profit or a loss? Suppose there are...
QUESTION 1 1 points Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (1.8,Q-97) and (L·9,Qo1433. Then the marginal product of h worker is a 46 units of output. b. 143 units of output c1 unit of output. d. 59 units of output. 1 points QUESTION 2 Table t Bob's Bulldozers Cost Table Quantity able Margina erage age Average otal...
Most questions answered within 3 hours.
-
26) Briefly describe, using words or simple diagrams, the
chemiosmotic theory for coupling oxidation to phosphorylation...
asked 6 minutes ago -
Suppose that XX is a random variable with mean 16 and standard
deviation 5 . Also...
asked 58 minutes ago -
Calculate the number density of argon gas at a temperature of
24C and a pressure of...
asked 4 hours ago -
Alternative
Classification
How to Estimate
Probabilities from Data? ( For continuous Attributes)
And How to generate...
asked 4 hours ago -
An explosion breaks a 20.0-kg object into three parts. The
object is initially moving at a...
asked 5 hours ago -
Calculate the approximate number of residues of Rubisco, which
is involved in carbon fixation in plants,...
asked 6 hours ago -
Other decisions about scientific claims can have a much broader
impact.ENERGYarrow-10x10.png, environment, health, security - all...
asked 6 hours ago -
I need to write a research paper and work cited about this
topic: The United States...
asked 7 hours ago -
Hello! I was wondering if I could have some help?
If the vapor pressure of carvone...
asked 7 hours ago -
An economist wants to estimate the mean per capita income (in
thousands of dollars) for a...
asked 8 hours ago -
What would be the input/output characteristic of a circuit
obtained by putting two of your 2's-complementers...
asked 8 hours ago -
In Drosophila, the transition from the syncytial blastoderm
stage to the cellular blastoderm stage is a...
asked 8 hours ago