A. Suppose all workers have the same preferences represented by the utility function
U = W^(1/2) + S,
Where W is the wage rate and S is a measure of on the job safety. Suppose there are only two types of jobs in the economy: (1) a “safe” job (S=1) and a “dangerous” job (S=0). Let Ws be the wage rate in the “safe” job. Let WD be the wage rate in the “dangerous” job. If “safe” jobs pay $25 per hour, then what is the wage rate in the “dangerous” jobs? Demonstrate and explain. Is there a compensating wage differential? If so, how big is it? Demonstrate and explain. If not, explain why not. (8 points)
B. Now suppose worker preferences change to
U = W1/2 + 2S
Characterize what has happened to worker preferences. Suppose “safe” jobs still pay $25 per hour. What – if anything – becomes of the wage in “dangerous” jobs? Demonstrate and explain. What – if anything – becomes of the compensating wage differential? Demonstrate and explain (12 points)
WAGE DIFFERENTIALS, PART 2. (30 points in section)
Over a decade ago The Economist noted (“Pop, Crackle, Snap,” April 3, 2004). “Even desperate job seekers think twice about accepting hazardous work such as coal mining, cow slaughtering or cleaning up asbestos sites.” Suppose employers are able to provide different combinations of wages and job safety. Suppose individuals have different tastes for wages and safety.
Draw and identify the different worker’s indifferences curves for wages and safety. Explain which curve(s) represents which worker. (5 points)
Draw and identify the different firms isoprofit curves for wages and salary. Explain which curve(s) represents which firm. (5 points)
C. Given your answers in Parts A and B above, use suitable economic analysis to demonstrate whether or not people can be persuaded to do dangerous work. (10 points)
D. Aside from safety, what other factors that can result in equilibrium wage differentials? Explain how each factor can be expected to affect pay. (10 points)
LABOR MARKET DISCRIMINATION. (20 points in section)
A. Suppose there are two types of workers. Type A and Type B. Suppose the market wage for Type A workers is $20 while the wage for Type B workers is $16. Moreover, there are only 30 Type B persons in the labor pool, the rest of the labor supply consists of Type A persons. Furthermore, firms differ only with respect to their tendencies to be prejudiced about Type B workers. Suppose a firm sells output in a competitive market at a price of $4 per unit of output, recons it should produce 100 units of output, and faces the following production function:
Q = 5LA + 5LB
where Q is output, LA is the number of type A workers, and LB is the number of type B workers.
1. Are type A workers more productive than Type B workers? Demonstrate and explain (5 points)
2. Suppose Atlas Manufacturing Co seeks to minimize cost. How many workers of each type would it hire? Demonstrate and explain (5 points)
3. Suppose Ajax Enterprises exhibits a discrimination coefficient of 4. How many workers of each type would it hire? Demonstrate and explain (5 points)
4. Suppose Hidebound Industries exhibits a discrimination coefficient of 6. How many workers of each type would it hire? Demonstrate and explain. (5 points)
LABOR MARKET DISCRIMINATION? (30 points in section)
Suppose an employer cannot know your true productivity but can observe a “credential” that is correlated – imperfectly – with your productivity. Do you want the credential to be as informative as possible or “noisy”? Demonstrate and explain (10 points)
Suppose there are type types of workers, type 1 and type 2. Suppose schooling, S, and job experience, Exp, are factors that affect monthly pay, W. Specifically, suppose the earnings equation of type 1 and type 2 persons are given by:
W1 = 2,000 + 100S1 + 400 Exp1 & W2 = 1,900 +110S2 + 300Exp2
1. Show how much of any wage gap can be explained and how much of the gap may be due to discrimination.
2. Without doing any computations at all, can you tell if there is any pay discrimination going on? If so, who is favored? Demonstrate and explain.
3. Suppose type 1 workers average 10 years of schooling and type 2 workers average 15 years of schooling. Further, suppose type 1 workers average 20 years of job experience while type 2 workers average 10 years of job experience. Is most of the earnings gap due to discrimination or can most of it be explained? Demonstrate.
Member perception is a strategy for gathering subjective information in social research. This strategy includes the inundation of the scientist in the topic with the goal that it can be seen in its common setting. It includes variable levels of contribution of the specialist on a continuum running from latent (perception) to dynamic (cooperation). The qualification amongst investment and perception depends on the closeness of the specialist tothe topic with perception including outer assessment and recording of occasions without the impedance of the scientist while support speaks to an inward view in which the analyst records sees from inside the gathering by acting, obviously or secretly, as a part so as to encounter the fact of the occasions. For instance, in Humphreys investigation of gay people, he assumed a dynamic part by going about as post for the police while the gay experience happened out in the open toilets (Humphreys, 1970). In spite of the fact that Humphreys was watching occasions and assembling information, he was 'inside' the circumstance that happened along these lines his quality had some effect on occasions; things would not have happened precisely as they did had he not been available. Cases of a uninvolved part incorporate specialists who watch things 'as they happen' however with no impact at all on the occasions that unfurl, other than by their unimportant nearness. For instance, Patton portrays specialists who were recording the responses ofthe gathering of people to Billy Graham's outreaching lecturing (Patton, 2002). Their part was to record occasions without taking any part in the procedures, althoughtwo scientists were so affected by his proclaiming that they set aside theirnotes and joined the gathering. One of the focal points ofparticipant perception is its capacity to encourage the accumulation of 'rich' data that is much of the time not accessible from different sources (Babbie, 1995). Accordingly, it can be utilized to supplement, educate or repudiate conjectured research and it can significantly improve the accessible information regarding a matter subsequently. It can be utilized either as a preparatory advance in an exploration consider by which the specialist watches occasions 'as they happen' keeping in mind the end goal to define a theory for encourage examination or it can be utilized at a further developed phase of the exploration with a specific end goal to test a speculation framed based on hypothetical research (Patton, 2002). It is accepted to inspire 'genuine' and 'certifiable' data that has not been sifted or revised by the exploration members as can happen in connection to meeting or poll information and, all things considered, gives special bits of knowledge into the subjective perspective of the members in the examination. With perception, members may not understand that they are being observed so they don't direct their conduct in any capacity in this way the information accumulated in unadulterated. It likewise gives wealthier data than meetings or surveys on the grounds that it can consider non-verbal cooperation and conduct (Berg, 2003). All things considered, it can be a profitable methodof looking into the impact of structures or occasions on people andgroups. There is likewise the likelihood that sudden and unexpected occasions will happen over the span of the perception subsequently its incentive in getting to one of a kind information (Berg, 2003). Similarly, even with more dynamic investment from the analyst, the subjects of the exploration may not understand that they are being seen as it isn't exceptional for the specialist to darken their character by acting like an individual from the gathering or as somebody who might normally come into contact with them. For instance, in investigations of the manner by which rationally sick patients are dealt with by specialists and others in the medicinal calling, scientists were conceded into emotional wellness offices by acting like patients so they could encounter the truth of life inside such a domain, something that would not have been conceivable had they reported their essence and their motivation (Winstein, 1982). As this case illustrates, member perception can be an approach to get to data from the individuals who may be hesitant to give meetings or who might introduce apolicy-driven perspective of the subject (Bogdan, 1972). Now and again, the best way to get around such obstructions is to increase secret access to nature keeping in mind the end goal to encounter specifically what is going on (Spradley, 1997). There are impediments to this exploration strategy. It can be tedious, both regarding the genuine perceptions and in planning and breaking down the extensive measure of resultant information. This may make it a less savvy methods for leading exploration (Jorgenson, 1993). A moment confinement is that it has a tendency to include the perception of just a couple of cases of a specific subject, conduct or occasion along these lines there is a farthest point to the degree to which the discoveries are amiable to speculation (Spradley, 1997). A further feedback that can be leveled against member perception is that it is naturally subjective as it notonly centers around a solitary (or predetermined number) of specific perceptions butthat the account of the resultant information is liable to the translation of the specialist (Jorgenson, 1993). Likewise, there is a probability of cognizant or oblivious predisposition which is conflicting with its appearance, especially in connection to perception as opposed to investment, of a goal and logical research strategy. This feedback is advanced in connection to support in light of the fact that the analyst assumes some sort of part inevents that unfurl subsequently isn't a simple inactive beneficiary of data however issomeone who adds to the shape and substance of the resultant information (Spradley, 1993). The last feedback of member perception that should be tended to is especially correlated to cooperation by the exploration andthat is issues of duplicity of the examination subjects and the moral issuesthat subsequently emerge. This was shown in Humphrey's exploration with gay people as he acted like an individual from their group subsequently getting to information thatwould not have been accessible without this double dealing. The training ofdeception on explore subjects is one that should be thought about painstakingly when measuring the adjust of the qualities and restrictions of this examination strategy (Spradley, 1993).>GET ANSWER