plete the following sentences: In insurance markets, from low-risk customers. In insurance markets, ✓ can arise if individuals may change their behavior after the insurance is bought, so that they behave in a more high-risk manner than they did before. In labor markets, candidates from low-skill job-candidates. In labor markets, workers ✓ can arise if insurers can't tell high-risk customers ✓ can arise if hiring firms can't tell high-skill job- ✓ can arise if managers can't observe the effort of

plete the following sentences: In insurance markets, from low-risk customers. In insurance markets, ✓ can arise if individuals may change their behavior after the insurance is bought, so that they behave in a more high-risk manner than they did before. In labor markets, candidates from low-skill job-candidates. In labor markets, workers ✓ can arise if insurers can't tell high-risk customers ✓ can arise if hiring firms can't tell high-skill job- ✓ can arise if managers can't observe the effort of

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 4PA

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According to the Efficiency Wage Theory, which one of the following is NOT an incentive for firms to pay efficiency wages above the market clearing wage rate? a. Efficiency wages result in healthier workers. b. Efficiency wages reduce staff turnover costs. C. Efficiency wages reduce issues due to information asymmetry. d. Efficiency wages reduces opportunity costs of low effort to workers. e. All of the reasons above are appropriate incentives for firms to pay efficiency wages.
How do federal agencies typically value lives saved by health, safety, and environmental regulations? A. Agencies consider medical expenses, pain and suffering, lost wages, and funeral and burial expenses B. Agencies ask individuals how much they would pay to avoid dying and average the results for the population C. Agencies use labor-market data to determine how much individuals are willing to pay to avoid (or, willing to accept to face) small fatality risks and use this information to generate a value of statistical life D. (A), (B), and (C) E. (B) and (C)
The way the workers’ compensation system works now, employees permanently injured on the jobreceive a payment of $X each year whether they work or not. Suppose the government were toimplement a new program in which those who did not work at all got $0.5X but those who did work got$0.5X plus workers’ compensation of 50 cents for every hour worked (of course, this subsidy would bein addition to the wages paid by their employers). What would be the change in work incentivesassociated with this change in the way workers’ compensation payments are calculated?
Some people claim that degrees in liberal arts do not really train students for the job market. Their education provides little training value for their future jobs. According to the theory of signaling, why are such “useless” degrees useful in the job market? a. The fact that student loans are available to students in all disciplines signals that the government cares about such degrees b. The fact that the students completed the degrees signals to their potential employers that they can learn and perform c. All of the answers are correct d. The fact that students want to complete such degrees signals that they care about the knowledge they accumulate
The figure compares the compensation that a shoe salesperson receives if she is on a straight salary of $40 per day or if she receives a commission of $5 for each pair of shoes sold. 100- Commission 90- Which compensation structure is preferred by the salesperson? 80- Suppose the salesperson sells more than 8 pairs of shoes per day and only cares about compensation. 70 60- For the salesperson, the is preferred. 50- Salary 40- 30- 20- 10 10 12 14 Pairs of shoes per day 16 18 20 Compensation received per day
You just got a job in Washington, D.C. You move into an apartment with some acquaintances. All your roommates, however, are slackers and do not clean up afterthemselves.You,ontheotherhand,cancleanfaster than each of them. You determine that you are 70% faster at dishes and 10% faster with vacuuming. All of these tasks have to be done daily. Which jobs should you assign to your roommates to get the most free time overall? Assume you have the same number of hours to devote to cleaning. Now, since you are faster, you seem to get done quicker than your roommate. What sorts of problems may this create? Can you imagine a traderelated analogy to this problem?
When Alan Greenspan (an economist who wouldlater chair the Federal Reserve) ran a consulting firmin the 1960s, he primarily hired female economists. Heonce told the New York Times, “I always valued menand women equally, and I found that because othersdid not, good women economists were cheaper thanmen.” Is Greenspan’s behavior profit-maximizing? Isit admirable or despicable? If more employers werelike Greenspan, what would happen to the wagedifferential between men and women? Why mightother economic consulting firms at the time not havefollowed Greenspan’s business strategy?
It has been argued by some that immigration reduces job opportunities for native-born workers. Based on our understanding of labor markets, we would conclude that This statement is generally inconsistent with economic logic because wages do not differe from country to country and immigration is generally not economically logical. this statement is generally consistent with economic logic becuase there are only a fixed number of jobs available and immigrants are willing to work for lower pay than native born workers. This statement is generally inconsistent with economic logic since more supply can lower wages and induce additional labor demand. This statement is generally consistent with economic logic because when firms create new jobs they have a need for foreign workers with different edcuational skils than native born workers.
Governments generally want people to get immunised against highly contagious viruses suchas COVID-19. Nonetheless many people refuse to take the vaccination jab, because theyoverestimate the likelihood of side effects, or because they are complacent about gettinginfected or the severity of symptoms they might experience. They also might not care orunderstand that their immunity protects others. Use the theories of market failure andgovernment intervention to analyse the motives of government, the anti-vax phenomenonand their consequences. What, if anything should government do to make more people getvaccinated? What would be the problems with such interventions?
Workers are compensated by firms with benefits in addition to wages and salaries. The most prominent offered by many firms is health insurance. Suppose that in 2000, workers at one steel plant were paid $30 per hour and in addition received health benefits at the rate of $6 per hour. Also suppose that by 2010 workers at that plant were paid $31.50 per hour but received $13.5 in heakth insurance benefits. a. By what precentage did total compensation (wages plus benefits ) change at this plant from 2000 to 2010? Total compensation increased or decreased by________ percent? What was the approximate average annual percentage change in total compensation? b. By what percetage did wages change at this plant from 2000 to 2010? Wages increased or decreased by ______percent? What was the approximate average annual percentage in wages? c. If workers value a dollar of heath benefits as much as they value a dollar of wages, by what total percentage will they feel their incomes have risen over…
Firms compensate workers with "benefits" in addition to wages and salaries. The most prominent benefit offered by many firms is health insurance. Suppose that in 2010, workers at one steel plant were paid $35 per hour and in addition received health benefits at the rate of $7 per hour. Also suppose that by 2020 workers at that plant were paid $36.75 per hour but received $31.50 in health insurance benefits. Instructions: Enter your answers rounded to 1 decimal place. a. By what percentage did total compensation (wages plus benefits) change at this plant from 2010 to 2020? Total compensation increased by %. What was the approximate average annual percentage change in total compensation? % b. By what percentage did wages change at this plant from 2010 to 2020? Wages increased by %. What was the approximate average annual percentage change in wages? % c. If workers value a dollar of health benefits as much as they value a dollar of wages, by what total percentage will they feel that their…
What would happen to wages and number of individuals employed in that market if new law required all businesses in that market and other markets to provide their employees a better health insurance policy? Why? Use your analysis to explain who actually pays the costs of health insurance premiums in competitive labor markets.