Economics

David C. Colander

Chapter 17 Work and the Labor Market - all with Video Answers

Educators

Chapter Questions

01:29

Problem 1

Why are social and political forces more active in the labor market than in most other markets? $(L O 17-I)$

Jennifer Stoner

Numerade Educator

00:44

Economist Edward Prescott observed that while Americans worked 5 percent fewer hours per week than the French in the $1970 \mathrm{~s}$, they worked 50 percent more hours per week in the early 2000 s. He found that taxes accounted for nearly all of the difference. What was his likely argument? (LOI7-1)

Erwin Antoni

Numerade Educator

01:39

Problem 3

How is opportunity cost related to the supply of labor? $(L O I 7-I)$

Banhishikha Sinha

Numerade Educator

01:10

Problem 4

Using the economic decision rule and opportunity cost, explain why an increase in the wage rate increases quantity of labor supplied? $(L O I 7-I)$

Banhishikha Sinha

Numerade Educator

01:29

Problem 5

Is an increase in the marginal income tax rate reflected by a shift in the after-tax supply of labor or a movement along the supply curve when the pretax wage rate is on the vertical axis? Explain your answer. $(L O I 7-1)$

Kaylee Mcclellan

Numerade Educator

05:31

Problem 6

Using the concept of opportunity cost, explain why welfare programs might increase the number of poor. $(L O 17-1)$

Oluwadamilola Ameobi

Numerade Educator

00:47

Problem 7

If the wage goes up 20 percent and the quantity of labor supplied increases by 5 percent, what's the elasticity of labor supply? $(L O I 7-I)$

Daniel Cisneros

Numerade Educator

04:29

Problem 8

List four factors that contribute to the elasticity of labor demand. $(L O I 7-2)$

David Gagnon

Numerade Educator

02:12

Problem 9

List four shift factors of demand and their effect on demand. $(L O I 7-2)$

Kaylee Mcclellan

Numerade Educator

07:10

Problem 10

The president of the United States receives an annual salary of $\$ 400,000,$ while some top baseball players earn more than $\$ 30$ million annually. $(L O I 7-2)$
a. Based on marginal productivity theory, what does this say about their contributions to society?
b. What qualifications to your answer might you suggest about their relative contributions, and what do your adjustments have to say about marginal productivity theory?

Md.Daniyal Arshad

Numerade Educator

10:21

Problem 11

Economists Mark Blaug and Ruth Towse studied the market for economists in Britain and found that the quantity demanded was about 150 to 200 a year, and that the quantity supplied was about 300 a year. $\quad(L O I 7-3)$
a. What did they predict would happen to economists" salaries?
b. What likely happens to the excess economists?
c. Why doesn't the price change immediately to bring the quantity supplied and the quantity demanded into equilibrium?

Oluwadamilola Ameobi

Numerade Educator

05:05

Problem 12

Demonstrate graphically the effect of a minimum wage law. Does economic theory tell us such a law would be a bad idea? $(L O I 7-3)$

Yi Chun Lin

Washington University in St Louis

02:31

Problem 13

As telecommunications improve, performers can reach larger and larger audiences. In the past, one could only perform in a concert hall; today one can perform for the entire world. How might that change in technology affect the relative pay of performers? $(L O 17-3)$

Kaylee Mcclellan

Numerade Educator

01:05

Problem 14

New websites such as iFreelance.com have developed a place for companies to post projects for which freelancers can bid. What is the likely effect of this new market on market demand for freelancers? Wages? $(L O 17-3)$

Niamat Khuda

Numerade Educator

04:44

Problem 15

The town of Oberlin, Ohio, has one hospital. How would you classify this market structure, and what effect will this market structure likely have on wages of nurses in Oberlin compared to a perfectly competitive market structure? Demonstrate your answer graphically. $(L O I 7-3)$

Heather Duong

Numerade Educator

01:46

Problem 16

"Eight cents of every dollar spent at retail stores in America is spent at Walmart. With such market power, Walmart is able to name the price at which it is willing to buy goods from suppliers." $\quad(L O I 7-3)$
a. Could this happen if Walmart's suppliers were operating in a perfectly competitive market?
b. What if it were operating in an imperfectly competitive market, specifically a monopsonistic market?
c. What would be the lower limit of the price Walmart could name?

Doris Bennett

Numerade Educator

01:57

Problem 17

Show graphically how a minimum wage can simultaneously increase employment and raise the wage rate. $(L O 17-3)$

Kaylee Mcclellan

Numerade Educator

02:04

Problem 18

Explain each of the following phenomena using the invisible hand or social or political forces: $(L O 17-3)$
a. Firms often pay higher than market wages.
b. Wages don't fluctuate much as unemployment rises.
c. Pay among faculty in various disciplines at colleges does not vary much although market conditions among disciplines vary significantly.

Doris Bennett

Numerade Educator

03:36

Problem 19

The International Labor Organization estimates that 250 million children in developing countries between the ages of 5 and 14 are working either full-or part-time. The estimate of the percentage of children working within particular countries is as high as 42 percent in Kenya. Among the reasons cited for the rise in child labor are population increases and poverty. $(L O 17-3)$
a. Why do firms hire children as workers?
b. Why do children work?
c. What considerations should be taken into account by countries when deciding whether to implement an international ban on trade for products made with child labor?

Jennifer Stoner

Numerade Educator

02:18

Problem 20

a. List three types of demand discrimination.
b. Which is the most difficult to eliminate? Why?
c. Which is the easiest to eliminate? Why? $(L O I 7-4)$

Alexa Moschella

Numerade Educator

03:24

Problem 21

Which type of discrimination is easier to address legally - demand side or institutional? Explain your answer. $(L O I 7-4)$

Sharon Edamala

Numerade Educator

00:52

Problem 22

A recent study reported that the average male CEO of Fortune 500 firms is 6 feet, about 2.5 inches more than the average male. Why might this be difficult to eliminate through laws that restrict companies from hiring based on height? $(L O I 7-4)$

Bryan Luo

Numerade Educator

00:59

Problem 23

According to a study by economists Muriel Niederle and Lise Vesterlund, women are less willing to participate in competitive environments. $(L O I 7-4)$
a. What is the potential impact on the number of women in high-level management positions?
b. If this were the cause of fewer women working in high-level management, would you characterize it as discrimination? If so, what type? If not, why not?

James Kiss

Numerade Educator

02:12

Problem 24

Comparable worth laws require employers to pay the same wage scale to workers who do comparable work or have comparable training. What likely effect would these laws have on the labor market? (LOI7-5)

Tristan Wille

Numerade Educator

05:05

Problem 25

A teen subminimum training wage law allows employers to pay teenagers less than the minimum wage. $\quad(L O 17-5)$
a. What effect would you predict this law has, based on standard economic theory?
b. In analyzing the effects of the law, Professors Michael Card and Alan Kreuger of Princeton University found that few businesses used it and that it had little effect. Why might that have been the case?

Yi Chun Lin

Washington University in St Louis

01:01

Problem 26

In 1993 Congress passed the Family and Medical Leave Act (FMLA), which requires firms with more than 50 employees grant a 12 -week unpaid leave of absence for family and medical reasons. What is the likely effect on the demand for female employees? $(L O I 7-5)$

Niamat Khuda

Numerade Educator

02:08

Problem 27

What has happened to union membership in the United States since the 1960 s? $\quad$ ( LO $17-5$ )

Banhishikha Sinha

Numerade Educator

03:54

Problem 28

What is the difference between a union shop and a closed shop? Which did the Taft-Hartley Act make illegal? How have more recent laws changed the role of unions? $(L O 17-5)$

Ansh Varma

Numerade Educator