Household production, Macroeconomics

Assume two individuals, A and B, are considering marriage, and each face the same amount of hours a week to be split between market-labor and home-labor.  Assume that A can make $20 of market goods per week and $10 household goods per week; assume B can make $10 of market goods per week and $20 of household goods per week. Graphically depict a situation where, upon marriage, B specializes in the production of one good and A splits their time between market and home labor. (Clearly identify the intercepts and kink in their collective production possibilities curve.)

Assume A is a man and B is a woman. We know that the participation rates for men have been decreasing, while at the same time they have increased for women over the 20th C. Assume that the household starts with each individual specializing in the production of different goods. Graphical depict how an increase in the market-labor wage of B could increase her supply of labor (to the market) and at the same time decreases the supply of labor (to the market) for men.

Assume that A and B, upon marriage, specialize in the production of different goods. Consider the possibility that there is effectively no difference between people's productivity when it comes to the production of household goods. Graph their collective PPF using the values in (a) except that maximum amount of household goods produced by each is 10 units.

Assume that, with the values in (a), A and B specialize in the production of different goods upon marriage. Draw two graphs. The first graph shows a bilateral increase in wage inequality (steeper PPF for A and shallower PPF for B), specialization in different goods, but the household has lower utility than if there was specialization in (a).

Posted Date: 2/23/2013 4:53:26 AM | Location : United States

Related Discussions:- Household production, Assignment Help, Ask Question on Household production, Get Answer, Expert's Help, Household production Discussions

Write discussion on Household production
Your posts are moderated
Related Questions
At the same meeting of the open market committee where it announced Quantitative Easing 3, the Fed chose to also announce that its currently low Fed funds rate of 0 to .25% would b

Illustrate the policy - Beggar my neighbour 'Beggar my neighbour' policies are government policies which attempt to gain a competitive benefit at the expense of other countries

GDP is an important indicator of a nation's economic performance. It has many components which contribute to the growth of the economy. Oil is a minor component of GDP and therefor

What are the different stages of analysis in planning activities?

Q. Define Effective exchange rate? Suppose that we are interested in external competitiveness of a country, let's say Japan. To do this we could look at evolution of a particul

List and briefly describe the principal causes of high population growth in developing countries and the major consequences.

Q. Define the Labor Market? A significant macroeconomic variable is the total amount of labor which is used in a certain time period. Amount of labor and amount of capital are

In the late 1990s, a growing number of economists expressed concern that the world policy makers were often focusing too much on fighting inflation, without fully taking into accou

What is Bolivia''s growth in 1985?

Suppose you serve on an environmental policy planning board for the federal government. Your task is to propose a policy initiative aimed at reducing urban air pollution, using the