Economics Homework Help

I must receive a high B or an A on this assignment. Each question has three attempts, the same question is not used in the new attempts, you will send me your first round of answers, I will plug them in, make sure they are correct, if the grade is high enough you will not have to do any other attempts, if not, I will send you the second attempts etc.

I will send ALL graphs when a tutor is chosen.

1) Alex has the following labor supply curve. 

*Graph 1*

The curve represents Alex’s trade-off between labor and leisure. Alex prefers more labor to leisure when his wage rate is _____ (below $60, above $60).

Now suppose that the labor market consists of 1,000 workers, including Alex. Identify which of the curves on Graph 2 is likely to represent the market supply curve.

*Graph 2*

a) Curve III

b) Curve II

c) Curve I

2) An economics consulting firm is interviewing consultants. The firm hires, Erin, a recent PhD graduate in economics, and pays her an annual wage of $75,000. It also hires Julia, a recent master’s degree graduate in economics, and pays her an annual wage of $60,000. Erin and Julia were born in the same country and attended the same university for graduate school.

According to economists, the difference in earnings is mostly due to ______ (compensating differentials, market power, statistical discrimination, differences in human capital).

3) Graph 3 shows the labor demand and labor supply curves for unskilled labor that is covered by the federal minimum wage law.

*Graph 3*

Suppose the minimum wedge is $10 per hour. Then the number of workers employed in the covered sector of unskilled labor is ______ (50000, 20000, 40000, 30000) workers, and there is a surplus (excess supply) of _____ (60000, 40000, 20000, 80000) workers in that sector.

4) Tim, a resident of Econoland, currently works 20 hours a week and earns an annual income of $60,000. Table 1 shows income tax rates in Econoland.

*Table 1*

This is an example of _______ (regressive, progressive proportional) income tax.

After paying income taxes, Tim receives _______ ($48000, $52000, $42000) per year.

If Tim works an additional 10 hours a week *30 hours total in a week*, his annual income will be $90,000. After paying income taxes, Time will receive _______ ($81000, $78000, $75000) per year. In other words, by working an additional 10 hours per week, Tim will receive an additional _______ ($27000, $21000, $24000). 

If Tim works 10 more hours in a week *40 hours a week total*, his annual income will further increase to $120,000. After paying income taxes, Tim will receive ______ ($105000, $99000, $102000) per year. In other words, by working 10 more hours per week, Tim will receive _______ ($24000, $27000, $21000) more than what he will receive if he works only 30 hours a week.

As Tim works more, the additional amount he receives from working 10 more hours _______ (increases, decreases, does not change), which means his cost of leisure _________ (decreases, does not change, increases).

5) Graph 4 shows the unskilled labor market in a hypothetical economy. Suppose that the economy initially has a very strict immigration policy and intensely enforced borders. Therefore, there are no illegal immigrants.

Now suppose, that the government cuts back on border enforcement. As a result, a large number of immigrants illegally cross the border looking for work. Assume almost all of the immigrants are unskilled laborers. Adjust the graph to show how this impacts the unskilled labor market, all other things held constant.

*Graph 4*

Illegal immigration causes the equilibrium wage to _____ (decrease, increase) from $12 to _____. This means that the cost of doing business ______ (declines, rises), and the market price of the product being produced by the unskilled labor will ______ (decline, rise).

6) Two economist agree that labor market discrimination against certain workers unfairly leads to lower wages for the disfavored group. Economist X argues that the government intervention is most likely necessary to eliminate this unfair treatment, whereas Economist Y argues that the best solution to the unfair treatment is to let the market work to eliminate it on its own.

Economist Y is most likely to be correct when labor and product markets are highly competitive and the lower wages of the disfavored group result from:

a) Discrimination by employers

b) Statistical discrimination

c) Differences in human capital.

7) Graphs 5 & 6 show the supply of and demand for assistant professors in music (left) and in engineering (right) for a hypothetical university.

*Graphs 5&6*

The equilibrium of an assistant professor in music is ______ ($72000, $48000, $32000, $40000), and the equilibrium quantity is _______ (20, 30, 16, 15). assistant professors in music. On the other hand, the equilibrium wage of an assistant professor in engineering is _______($48000, $60000, $72000, $84000), and the quantity is _______(12, 20, 16, 8) assistant professors in engineering.

Suppose the university sets the same wage for all assistant professors in each department. Fill in Table 2 with the quantity demanded and supplied for each type of professor when the university sets wages to $48000 and $72000, respectively.

*Table 2*

Table Options are as follows:

Music:

QD 48: 20, 15, 16, 5

QD 72: 4, 25, 28, 5

QS 48: 15, 16, 20, 35

QS 72: 5, 4, 28, 35

Shortage/Surplus 48: Shortage, Surplus, Neither

Shortage/surplus 72: Shortage, Surplus, Neither

Engineering:

QD 48: 8, 24, 16, 30

QD 72: 28, 16, 20, 12

QS 48: 24, 16, 30, 8

QS 72: 12, 20, 16, 28

Shortage/Surplus 48: Shortage, Surplus, Neither

Shortage/surplus 72: Shortage, Surplus, Neither

In summary, if the university sets a wage of $48000 for all assistant professors in every department, which is equivalent to a price ceiling for engineering professors, there will be _______ (8 more, 15 fewer, 8 fewer, 12 fewer, 15 more, 12 more) assistant engineering professors hired by the university than there would be if the university paid assistant engineering professors their equilibrium wage. Similarly, if the university sets a wage of $72,000 for all assistant professors in every department, which is equivalent to a price floor for music professors, there will be ________ (10 more, 15 fewer, 15 more, 10 fewer, 8 fewer, 8 more) assistant music professors hired by the university than there would be if the university paid assistant music professors their quilibrium wage.