Encourage additional spending on education

Assignment Help Macroeconomics
Reference no: EM131063732

1. A firm desires to lower absenteeism by rewarding attendance. The firm currently pays its workers a wage of Z dollars per day. A only two goods in a worker's utility function are money income and days of leisure and both are assumed to be normal goods. The number of days of leisure equals L = 365 - D, where L is number of days of leisure and D is number of days of work. The firm has information which indicates the average number of days worked per year was 210. Some workers worked as many as 250 days per year, whereas others showed up for work as few as 180 days. The firm desires to increase the average to 220 days per year. It attempts to do this by offering the following deal:

Offer a lump-sum annual bonus of B dollars to each worker who works at least 220 days a year.

a. Draw the budget line for the typical worker before the bonus program is implemented.

b. Draw the budget line for the typical worker after the bonus program is implemented.

c. Show the effect of this program on the total days worked by employees who were initially

(i) working less than 220 days per year; (ii) working 220 days or more per year.

d. Will this program necessarily raise the average days worked to 220? Explain.

2. To encourage additional spending on education by local school districts, the state government plans to offer aid. All families are alike in district X and these families determine the amount of money spent on education and on all other programs. Both education and all other programs are normal goods. District X is currently spending $500 per student, and the state would like to increase this amount
to $550 per student. The state is considering two proposals:

I. Lump sum grant 1. The state will pay $50 per child toward educational expenditures if the district spends at least $100 per child (which it does).

II. Lump sum grant 2. The state will pay $50 per child toward educational expenditures if the district spends at least $500 per child.

a. Prior to the implementation of any state proposal, show the optimum point for a representative family.

b. How does each proposal alter the budget line?

c. Using graphs, indicate whether the families in district X are more likely to increase per pupil expenditure (i.e., total per pupil expenditure minus per pupil state aid) under proposal 1 or under proposal 2.

d. Is it possible to determine if total spending on education per pupil (local+ state spending) will be higher under proposal 1 or under proposal 2? Explain.

Reference no: EM131063732

Questions Cloud

Discussion on the corporate governance statement : You should use some basic information such in this report such as: A description of the core business of the company including full details of its operating activities. A discussion on any significant issues emerging from the Directors' Report. A dis..
Factors of production are collectively owned and directed : Economic and political system in which factors of production are collectively owned and directed by the state; theoretically classless society where everyone works collectively for the common good is generally referred to as?
Estimated that the operating cash flows : A company is considering a 6-year project that requires an initial outlay of $21,000. The project engineer has estimated that the operating cash flows will be $4,000 in year 1, $5,000 in year 2, $7,000 in year 3, $7,000 in year 4, $7,000 in year 5, a..
How ernst young motivation to destroy the audit work : Assume the role of Oliver Flanagan in the case. Identify the actions you would have taken when Robert Trauger asked you to help him alter the 2000 Nextcard audit work papers. In answering this question, discuss alternative courses of action availa..
Encourage additional spending on education : To encourage additional spending on education by local school districts, the state government plans to offer aid. All families are alike in district X and these families determine the amount of money spent on education and on all other programs.
Requires an initial installed equipment cost : A company is considering a 3-year project that requires an initial installed equipment cost of $16,000. The project engineer has estimated that the operating cash flows will be $3,000 in year 1, $7,000 in year 2, and $9,000 in year 3. If the tax rate..
Discuss the meaning of the unique representations : Discuss the meaning of the unique representations of form that the artists created throughout the periods that we've examined. Were there instances in which the representation of the human form was more than just an image of what the artist saw?
Mayor to construct recreational facility : The Townsville City Council is considering a proposal by the mayor to construct a recreational facility at a cost of $1.0 million. The facility is expected to have a useful life of 30 years during which operating costs are expected to average $100,00..
Mortgage-backed securities : Mortgage-backed securities

Reviews

Write a Review

 

Macroeconomics Questions & Answers

  Each organization manager''s performance was evaluated yearly

Each organization manager's performance was evaluated yearly in relation to the specified multiple goals.

  Manager of a chemical company

Imagine that you are a manager of a chemical company. An accident has occurred in which chemicals leaked into the ground water nearby. The community is unaware of the accident. Compare the primary costs involved in cleaning up the water immediatel..

  When price is greater than average variable cost

continue to produce the level of output at which marginal revenue equals marginal cost. increase output to minimize its losses. reduce output to the level at which price equals average variable cost to minimize its losses. shut down to minimize it..

  Macroeconomics questions

what determines whether or not resources is scarce? Why is the concept of scarcity important to the definition of economics?

  Which would have a larger overall impact on ad

Which of the following changes to fiscal stimulus package of 2009 for $862 billion (under the bill called American Recovery and Reinvestment Act of 2009) would have a larger overall impact on AD Explain your answer in a paragraph or two with credi..

  Analysis of price elasticity and price increase

In an article about the financial problems of the USA today, Newsweek reported that the paper was losing about $20 million a year.

  Can firms sustain collusion using threat of nash equilibrium

Consider the following infinitely repeated model between two firms. Each period, the firms earn profits of 10 if they successfully collude. If a firm deviates from the aggreement, it earns 15 in the period in which it cheats. In each period that t..

  What was the ror on this investment

At the end of 1987, you bought a piece of land for $35,000. In addition to the $35,000, you paid $1,700 in closing costs (costs associated with the purchase and title registration). For the years 1988 through 2002, you paid, on average, $950 in pr..

  Does the price of shoes change by more in the short run

Suppose the government institutes a new sales tax on shoes, which are produced by a competitive constant-cost industry.

  Current and capital account balance

What is the amount of loans from rest of the world? What is the current account balance? What is capital account balance?

  Implementation of monetary policy

Assume an economy is going through a Recession what type of Monetary Policy requires to be implemented through the Federal Reserve?

  Comprise a reconciliation of the differences among forecasts

Comprise a reconciliation of the differences among the forecasts for GDP and a rationalization for which forecast

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd