7. You must select between two alternative summer jobs: Job A will pay you $2000 at the beginning of June, but you have to work for eight weeks. Job B will pay you $400 at the beginning of June and $205 each week for the next eight weeks. In all other respects, the jobs are comparable – either one will do. The current

7. You must select between two alternative summer jobs: Job A will pay you $2000 at the beginning of June, but you have to work for eight weeks. Job B will pay you $400 at the beginning of June and $205 each week for the next eight weeks. In all other respects, the jobs are comparable – either one will do. The current

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: Earnings And Discrimination

Section: Chapter Questions

Problem 5PA

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JosephmigratedtoCanadafromGhana5yearsago.Hecurrently works in sales but is considering quitting work for two years to earn an MBA degree. His current job pays $40,000 per year (after taxes), but he could earn $55,000 per year (after taxes) if he had an MBA. Tuition is $10,000 per year, and the cost of an apartment near campus is equal to the $10,000 he is currently paying. His discount rate is 6 percent per year. He just turned 48 and plans to retire when he turns 60, whether or not he earns his MBA degree. Based on this information, should he go for an MBA degree? Explain carefully with appropriate calculations.
3. In the upcoming year, the income from your current job will be $50,000. There is a 0.5 chance that you will keep your job and earn this income, and 0.2 chance that you will get a rise and earn 75,000. However, there is 0.3 chance that you will be laid off, putting you out of work for a time and forcing you to accept a lower paying job. In this case, your income is $25.000. The expected value of your income is thus $47,500. a) If your utility function has the formula 5001 - 0.0002f, determine the risk premium associated with this lottery. b) Provide an interpretation of the risk premium in this particular example.
6. Mickey and Minnie live in Anaheim. Mickey's net present value of lifetime camings in Anaheim is $500,000, while Minnie's is S150,000, The cost of moving to Orlando is $15,000 per person. In Orlando. Mickey's net present value of lifetime earnings would be $550,000, while Minnie's would be $125,000. a) If Mickey and Minnie choose where to live based on maximizing their joint income, will they stay in Anaheim or move to Orlando? b) Which of the following is Mickey (circle): Tied-mover Tied-stayer Neither e) Which of the folowing is Minnie (cirele): Tied-mover Tied-stayer Neither d) What is the maximum moving cost they would jointly be willing to pay to move to Orlando, if they decide to move?
5. Suppose that John could work 365 days per year and could earn $200 per day for each day he worked. a. Draw his budget line with respect to his labor-leisure tradeoff b. Suppose that John chooses to work 200 days per year. Draw the appropriate indifference curve, and not his equilibrium wage income and labor-leisure choices c. Suppose that John’s wage rises to $210 per day. Show how his equilibrium level of income and labor-leisure will change. d. Suppose John is ill ten days per year. Draw the impact of this illness on the equilibrium above. How will it change his equilibrium allocation of earnings and labor vs. leisure?
fmagine that somecne offered you a choice, You couldspend four years studying at the world 's best uni•versity, but you would have to keep your attendancethere a secret Or you could be awarded an official degree from the world's best university, but you couldn'.tactually attend. Which choice do you think wouldenhance your future earnings more? What does youranswer say about the debate over signaling versus human capital in the role of education?
Title 1. Suppose that the indifference curves between consumption and leisure are concave to the origin.... Description 1. Suppose that the indifference curves between consumption and leisure are concave to the origin. How many hours will a person allocate to leisure activities? 2. Suppose that the price of goods purchased in the marketplace rises. What is the impact of this price increase on the worker's reservation wage, on the worker's probability of entering the labor force, and on hours of work? 3. What happens to a worker's desired hours of work if employers pay an overtime premium equal to "time and a half'(that is, 1 .5 times the straight-time wage) for any hours worked in excess of 40 hours? What would happen to hours of work if the overtime premium were raised to double the straight-time wage?
A worker plans to retire at the age of 65, at which time he will start collecting his retirement benefits. Then there is a sudden change in the forecast of inflation when the worker is 63 years old. In particular, inflation is now predicted to be higher than it had been expected so that the average price level of market goods and wages is now expected to be higher. What effect does this announcement have on the person’s preferred retirement agea. If retirement benefits are fully adjusted for inflation?b. If retirement benefits are not fully adjusted for inflation?
Use the following to answer questions 76-80: Employee Benefits. The indifference curves in the graph below depict Shelly's preferences of wages and employee benefits. Shelly's annual value of marginal product is $45,000, and employers' cost of benefits is $1,000 per unit. Plot the wage-benefits curve in this example. Shelly chooses a job with employee benefit. O 10 15 20 O 25 wage (ths. 5/year) 23242525 40 30 20 15 10 h k h 05 10 15 20 25 30 35 40 benefits (units/year) units of the
Currentlyyouworkfor40hoursperweekatthewagerateof$20anhour.Your free hours are defined as the number of hours not spent in work per week, which in this case is 24 hours × 7 days − 40 hours = 128 hours per week. Suppose now that your wage rate has increased by 25%. If you are happy to keep your total weekly income constant, how many hours will you work? How many free hours will you have?
Suppose Carl’s wage-schooling locus is given byYears of Schooling Earnings 9 $18,500 10 $20,350 11 $22,000 12 $23,100 13 $23,900 14 $24,000Derive the marginal rate of return schedule. When will Carl quit school if his discount rate is 4 percent? What if the discount rate is 12 percent?
Consider a family where both the husband and wife work, and assume each spouse ha three more years to work (after the current year) before retirement. Following Table indicates the projected combined salary over the remaining working years if they each stay with their currentemployers. It also shows the combined salary they can expect if they relocate and change employers. Year Combined salaryat Current Job Combined salaryat New Job 1 $80,000 $83,000 2 $82,000 $87,000 3 $85,000 $92,000 Suppose the total cost of moving, including direct expenses, foregone earnings, and psychic costs(costs of leaving friends, coworkers, familiar surroundings, etc.) total $10,000. Assume all costs areincurred during the current year (year 0). a. If the discount rate is equal to the market interest rate of 6%, is this investment in mobility worthwhile?
10. was formed to ensure that employees have safe and healthy working conditions.