Reference no: EM132438142

QUESTION 1: (Evolution of the Household) Determine whether each of the following would increase or decrease the opportunity costs for mothers who decide not to work outside the home. Explain your answers.

Higher levels of education for women
Higher unemployment rates for women
Higher average pay levels for women
Lower demand for labor in industries that traditionally employ women

QUETSION 2: (Household Production) What factors does a householder consider when deciding whether to produce a good or service at home or buy it in the marketplace?

The householder must consider factors such as (1) whether production requires specialized skills or resources that the householder does not have, (2) whether home production would allow the householder to avoid taxes, (3) whether transaction costs can be lowered through production at home, and (4) the availability of technological advances that make home production more efficient. In general, a householder performs a task if his or her opportunity cost is lower than the price of buying the good or service in the market.