Question

outward? Do you think the shift would be a "parallel" one? Why, or why not? personal shift Chapter 3 Problems 3-1 Describe the major sources of income and expenditures for households 1. (Evolution of the Household) determine whether each of the following would increase or decrease the opportunity costs for mothers who decide not to work outside the home. Explain your answers. 1. Higher levels of education for women 2. Higher unemployment rates for women 3. Higher average pay levels for women 4. Lower demand for labor in industries that traditionally employ women

Answer 1

3.A personal PPF can shift to the right when the income rises,so that the consumer can purchase more of both the goods.The shift is parallel in the case as consumption rises for both goods.

3-1.Sources of income for household-

1.Households contain workers who sell their time to firms and receive wages in return.

2.Households are the ultimate owners of the firms—shareholders live in houses too—and thus any profits that firms make are returned to households.

Sources of expenditure-

The households either save this income or spend it to buy goods and services from the firms(both national and international).

2.The opportunity cost of not working depends on what the women will have to give up to stay at home(the cost of not working.)

1.Higher level of education increases the opportunity cost of not working.The woman will have to give up years of education.The cost of not working is significant.

2.Reduces opportunity cost because in a market with higher unemployment rate,getting a job will be very difficult.Even if the person gets a job the pay won't be high.The cost of not taking a job is low.

3.Increases opportunity cost because the cost of sacrificing a decent paying job is high.

4.Reduces opportunity cost for the reason explained in 2.

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