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Suppose there are two types of persons: high-ability and low-ability. The schooling required to obtain a particular diploma costs a high-ability person $8,000 per year, and it costs a low-ability person $10,001 per year. Firms wish to use this diploma as a signal of an individual’s ability. The firms intend to pay workers such that the present value of lifetime earnings for a worker without the diploma is $250,000 and the present value of lifetime earnings for a worker with the diploma is $450,000. (a) What range of years of education must be required to obtain this diploma in order for the diploma to be an effective signal of worker ability? (b) In a competitive labor market, how many years of education will be required to obtain this diploma in equilibrium? Briefly explain why this is the case.
If Starbucks introduces the world to premium blends, and demand rises substantially, illustrate what will happen in this market as it moves to a new equilibrium.
q1. consider a firm using a single variable input labor and a single fixed input capital. please explain what will
What compensation options available to employers? Describe each. Many have argued that the most important reason for adopting incentive compensation is to communicate to employees how they contribute to the company's success. Do you agree or disagree..
Derive IS curve by one of standard methods used in Macroeconomics. Explain in writing to illustrate what market your derivation brings equilibrium and explain how it accomplishes this.
In 300 words, define what is meant by Civil Liberties vs. Civil Rights and how they are different;
At what value of p would you be indifferent between these two alternatives? Given your response to part a, would you be classified as risk averse, risk neutral, or risk seeking? Suppose that alternative 2 changed so that you would receive $1,000 with..
Illustrate what price do you think this firm should charge if it wants to maximize its short-run profit.
Suppose the quote on pounds is $1.9721-35/£. If you converted $10,000 to pounds and then back to dollars, how many dollars would you end up with? The direct quote for Euro in U.S is $1.1005-$1.1008/e and for Swiss Franc is $1.0104-$1.0108/SFr. What i..
Have you ever been deceived by descriptive statistics (measures of central tendency or measures of dispersion)? How did this occur, and whose “fault” was it regarding the deception?
Contractionary fiscal policy could consist of
Illustrate what would have been the welfare implications of a ban on oil imports.
Can you relate the Classical and/or Keynesian macroeconomic models to assumptions about economic behaviors and to economics policies being implemented in the U.S. economy today?
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