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1. Revisit the definition of affirmative action: "Affirmative Action maybe defined as proactive steps to erase differences between minorities and non-minorities in the labor market". Suggest a modified version of the Becker model that includes a policy intervention requiring businesses to proactively hire Black workers. Describe the changes in the model parameter(s) and resulting changes if any in the hiring decisions of the three types of firms.
2. For the following questions, please apply the Oaxaca decomposition model. The following is the wage equation in the labor market.
= (Assume that all coefficients are significant at 1% significance level)
(1) Use evidence from the regression estimates to discuss whether this labor market is characterized by racial discrimination (Assume that "white" wages are benchmarks).
(2) Estimate the percentage of wage gap due to racial discrimination after controlling for years of schooling and years of work experience.
(3) What would be the coefficient on "Black" if there was no discrimination?
(4) Assume that all workers have 20 years of schooling and 5 years of work experience. Assuming that white and black workers are perfect substitutes, then what is the threshold value of the discrimination coefficient "d" at which prejudiced businesses will start hiring only white workers?
The cash-for-clunkers program: objectives and results. Did the car companies ripped the benefits of the program
Suppose the economy is in a recession and per capita disposable income is expected to decrease by 5%, then what percentage effect on sales would you expect to take place.
Calculate the point elasticity of the firm's total sales revenue with respect to the amount of labor used when q = 2.
how much are households paid for providing entrepreneurial ability.
What fraction x of your money should you invest in risky asset in order to maximize your utility. What happens if A is large.
Describe the profit-maximizing amounts of electricity to produce at the two facilities, the optimal price, and the utility company's profits.
What are the factors that affect the supply and demand of that good or service. How do you expect the demand and supply of that good or service to change in the next year.
She argues that this process will make for better utilize of information within the organization. The same concept could be applied beneficially within the corporation.
What are the values of the slopes of the budget lines shown in the diagram, and what does the slope of a budget line tell us?
In equilibrium, what is the price and quantity of toasters? What kinds of toasters are bought and sold and which option will a low-quality producer choose
Why do you think the compensation plan differ at the two firms. In particular why do you think Kaufmann s pays commission to salespeople, while Parkleigh does not.
tax consequences of owning, and determine whether it is better to rent or own. This is an example of the hidden-cost fallacy.
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