Question

According to the Roy model, negative selection of immigrants into the US would occur if a) The return to skills in the US is lower than the return to skills in the source country b) The return to skills in the US is equal to the return to skills in the source country c) The return to skills in the US is greater than the return to skills in the source country d) Less skilled and highly skilled workers migrate to the US with the same probability 1. In an equal chance economy, the Gini coefficient a) 2. Would equal 1, since everyone's income must be the same. b) Would equal 0, since everyone's income must be the same. c) Could be high or low, since the equal chance economy refers to intergenerational income mobility, independent of the amount of inequality in a society d) Could not be calculated 3, Assume the interest rate is 3%, and that you graduate from college this year. If your income is $40,000 higher each year after completing college, and you work for 30 years after college, the present value of this increase in income is equal to a) S40,000 (1.03)0 b) [$40,000/0.031/1.030 c) [S40,000/0.0311.030- [$40,000/0.0311.0360 d) IS40,000/0.03]- [S40,000/0.03/1.030 4. If a firm wants a new hire to receive general training, the firm will a) Offer a wage lower than the worker's value of marginal product, but will also cover some general training costs b) Offer a wage lower than the worker's value of marginal product, pushing the cost of general training on the worker c) Share the cost of general training by offering a wage below the value of the marginal product after the training is obtained d) Pay for the worker's general training 5 Students have the option to attend school in the US or in other countries, some impacted by war. If the cost of a year of school is $10,000 in the US, while a comparable year of school costs $6000 in the middle east, but the risk of death is 0.004 higher in the middle east, what is the estimated value of a statistical life? a) S1,000,000 b) $4,000,000 c) $6,000,000 d $10,000,000

Answer 1

1st question- Ans- A- return to skills to us is lower than the return to skills to origin country

Negative Selection occurs because people who have lower skills move, and more skilled stay in origin.