Labor economics

Assignment Help Business Economics
Reference no: EM13847636

Labor Economics

1. Assume households have utility function U(C, I) = 2cl1/2, can earn wage w per hour worked, and receive V in non-wage income. Total amount of time available for leisure l and labor h is T = h + l.

(a). Set up but do not solve the household's optimization problem.

(b). Write the Lagrangian.

(c). Set up do not solve the solution condition (hint: there are two first-order conditions, plus the budget constraint).

(d). Calculate the first-order conditions.

(e). Eliminate the multiplier λ from the first order conditions. You should end up with one combined first order condition, plus the budget constraint.

(f). Isolate either C or l form the combined first-order condition. Take the expression for the isolated variable and substitute it into the budget constraint. Now solve for whichever variable you didn't isolate.

(g). Substitute back and solve for the isolated variable.

(h). Calculate the expression for the elasticity for labor supply, σ.

Suppose T = 4.000 (80 hrs non sleeping time/working week (M - F) * 50 weeks/years).

(i) Calculate the reservation wage when V = 10,000 and again when V = 50, 000. Plot the labor supply curves for each of these values of V.

(j) Calculate the supply elasticity for the following w and V: (w = 10, V = 10,000), (w = 10, V = 30,000), (w = 20, V = 10,000), (w = 20, V = 30,000).

(k) Provide intuition for the results in (i) and (j).

Reference no: EM13847636

Previous Q& A

  Annual report in fundamentals of financial accounting

Does managements assessment of the financial condition agree with your assessment from the Financial Statements Paper Part I? Explain your response.

  Most likely increase the accounting return to shareholders

Which of the following would most likely increase the accounting return to shareholders?

  Determine whether people are actually zombie

Jimmy invented a device to determine whether people are actually zombies. He calls it "AreYouThere?" Jimmy wants to form a company and sell a million of the "AreYouThere?" devices. Using material found in the required readings, in 150 - 250 words, di..

  What is the enterprise value-EBITDA multiple

The market value of the equity of Thompson, Inc., is $307,000. The balance sheet shows $22,000 in cash and $200,000 in debt, while the income statement has EBIT of $97,000, and a total of $136,000 depreciation and amortization. What is the enterprise..

  Write a digital marketing plan for a real company

Your assignment is to write a digital marketing plan for a real company. The goal of this assignment is to enable students to gain familiarity with developing, writing, and presenting a realistic digital marketing plan

  What is the selling price of each gown

Bari Jay, a gown manufacturer, received an order for 740 prom dresses from China. Her cost is $30 a gown. If her markup based on selling price is 77%, what is the selling price of each gown?

  Debt-equity ratio-what is the amount of the net income

Professor Proton's Lab Supply Corp. has a debt-equity ratio of 57 percent, a total asset turnover of 1.12, and a profit margin of 4.9 percent. The total equity is $511,640. What is the amount of the net income? Round to the nearest dollar.

  Risk-free rate of interest

If the risk-free rate of interest (rf) is 3.5%, then you should be indifferent between receiving $1000 in one-year or. The effective annual rate for a certificate of deposit that pays 3.9% APR compounded monthly is closest to: Wesley Mouch's auto loa..

  Compute payback period is it a good measure of profitablity

Compute the payback period. Is it a good measure of profitability? Explain. Compute the NPV. Should Michele accept the proposal? Why or Why not?

  Explain the importance of brics

Explain the importance of brics

Reviews

Write a Review

 

Similar Q& A

  Does the most ferocious lion eat the christian

Ten lions confront a single Christian. The most ferocious lion can eat the Christian if he wants to. If the most ferocious lion does not eat the Christian, everyone goes home.

  Comparative advantage in producing oil

Saudi Arabia has a comparative advantage in producing oil because it:

  Total cost function derive the average total cost

Assuming that price of labor (L) and capital (K) are 12 and 3, respectively. One manufacturing company is facing production function given as Q=LK. derive your total cost function. Based on your total cost function, derive the average total cost.

  Health care expenditure

Over the past 30 years, health care expenditure in the U.S. grew at an average rate of 3.7% per year plus the rate of inflation, while expenditure on all other goods grew only 1% per year plus the rate of inflation. What seem to be the main reasons w..

  Illustrate what is the size of the bank actual reserves

The ABC Bank of Bermuda has outstanding checkable deposits of $300,000 also a reserve ratio of 10%. If it has excess reserves of $15,000, illustrate what is the size of the bank's actual reserves.

  What is the estimated real rate of interest

Suppose you purchase a $5,000 bond that pays 7 percent interest annually and matures in five years. if the inflation rate in recent years has been steady at 3 percent annually, what is the estimated real rate of interest?

  Factory floor to the intranet-internet

For this case read the article below concerning connecting the factory floor to the intranet/internet. This seems to be an effective way to manage an organization's inventory.

  Beekeeper gets that amount

Considering that the beekeeper gets that amount, what range of payments will the farmer admit.

  Why would it ever be used in the short-run

If we know that expansionary monetary policy cannot create real economic growth in the long-run, why would it ever be used in the short-run?

  What is the inflation-adjusted rate

A friend borrows $930 today and promises to pay you back $1900 in 8 years. If inflation is expected to be 2.7% per year during this time, what is the inflation-adjusted rate of return?_______ % per year

  Bond issue currently outstanding that has 25 years left

We have a bond issue currently outstanding that has 25 years left to maturity.the coupon rate is 9% and coupon are paid semi annually.the bond is currently selling for $908.72 per $1000 bond what is the cost of debt

  Large and small countries in making trade policy analysis

Which countries (and groups within a country) most likely oppose international labor standards? Explain why. Explain why some countries use voluntary export restraints (VER) instead of import quota? List and explain at least three reasons as to why c..

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