Reference no: EM13741930
However, firms that have installed expensive air purification systems are able to eliminate fumes from the glue inside the plants. Suppose that 50 of these pillow-manufacturing jobs exist in firms with air purification systems, while the other 150 of these jobs are in firms without air purification systems. Assume that the number of firms without air purification systems is fixed. Thus, the demand for workers in jobs with impure air is perfectly inelastic.
Assume that there are 200 workers who need to find jobs in this market (western foothills of North Carolina). The workers preferences are uniformly distributed between 11 cents and 2 dollars 10 cents such that Worker 1’s reservation wage (?w) for accepting a job with impure air is 11 cents; worker 2’s reservation price is 12 cents; worker 3’s reservation price is 13 cents and so on.
1. Draw the supply curve to jobs with impure air labeling as many points as you can.
2. Draw the demand curve for jobs with impure air labeling as many points as you can.
3. Find the equilibrium wage differential between jobs with impure and pure air. What is the interpretation of this equilibrium wage differential? Draw this equilibrium labeling as many points as you can.
4. Which workers will be employed at firms with impure air? What is their average reservation wage (w) for accepting a job with impure air?
5. Which workers will be employed at firms with pure air? What is their average reservation wage (w) for accepting a job with impure
6. Suppose the above New York Times article, which stresses the hazards associated to exposure to this dangerous chemical, changes the attitudes of the work force toward being employed in firms with impure air. Worker 1 now has a reservation price of 41 cents; worker 2’s reservation price is 42 cents; worker 3’s reservation price is 43 cents, and so on. As before, there are 150 jobs in firms without air purification systems, and this number is fixed. Thus, the demand for workers in jobs with impure air is perfectly inelastic. Find the new equilibrium wage differential between safe and risky jobs. Draw this equilibrium labeling as many points as you can.
7. Suppose now that the Occupational Safety and Health Administration (OSHA) forced additional firms to install air purification systems, bringing the number of jobs in firms without air purification systems down to 90. Find the new equilibrium wage differential between pure and impure air jobs. Draw this equilibrium, labeling as many points as you can.
|
Road trip game and determine if the game is symmetric
: Consider a group of 10 friends who are considering going on a road trip. In determining whether or not to go, each friend considers both how much they would enjoy the trip and how much it will cost them. The cost of the trip will be $500 total, and w..
|
|
What purpose does the regulation or policy serve
: Colleagues, assess and explain a major trade regulation or policy of the United States (please choose a regulation or policy other than one already discussed by your classmates). What purpose(s) does the regulation or policy serve?
|
|
Descriptive titles on each of the slides
: You have completed your report, it is time to design and present your findings. Your task is to organize and develop the three parts (introduction, body, and closing) of an effective presentation, based on your Justification Report (Part 3). Create a..
|
|
Identify all nash equilibria for the road trip game
: Consider a group of 10 friends who are considering going on a road trip. In determining whether or not to go, each friend considers both how much they would enjoy the trip and how much it will cost them. The cost of the trip will be $500 total, and w..
|
|
Installed expensive air purification systems
: However, firms that have installed expensive air purification systems are able to eliminate fumes from the glue inside the plants. Suppose that 50 of these pillow-manufacturing jobs exist in firms with air purification systems, while the other 150 of..
|
|
Us imports oil at the world price
: US imports oil at the world price, $55 per barrel. The domestic supply curve in barrels per day is S = 2500000 + 250000P with P in dollars. Domestic demand curve is D = 70,000,000 - 500000P. Draw the US demand and supply curves for oil and indicate h..
|
|
Additional ads would generate similar respones rates
: The first national bank received 3,000 inquiries following the latest advertisement decribing its 30-month IRA accounts in the Boston World, a local newspaper. The most recent as in similar advertising campaign in Massachusetts Business, a regional b..
|
|
The website face book chatting with a grown man
: Imagine a child as young as ten years old on the website Face book chatting with a grown man or grown woman. Should parents let their children as young as ten years old be on Face book? I think parents should not let their children or child be on Fac..
|
|
About the solow growth model-harrod-domar growth model
: After reading about the Solow growth model, which concludes that continued economic growth requires continual innovation, and Schumpeter’s dynamic growth model, does the combination of these two models provide an adequate model of technological chang..
|