Microeconomics (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134184241
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Chapter 14, Problem 9RQ
To determine
Effective programme that increases employment opportunities for welfare workers.
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Students have asked these similar questions
The government wants to encourage individuals on welfare to become employed. It is considering two possible incentive programs:
a. Give firms $2 per hour for every individual on welfare who is hired.
b. Give each firm that hires one or more welfare workers a payment of $1,000 per year, irrespective of the number it hires.
To what extent is each of these programs likely to be effective at increasing the employment opportunities of welfare workers?
Giving firms $2 per hour for every individual on welfare who is hired
O A. is likely to be unsuccessful because firms hire workers such that the marginal revenue product of labor equals the marginal cost of labor, and this approach
reduces the marginal cost of labor by $2, decreasing employment.
O B. is likely to be unsuccessful because the substitution effect from a wage decrease is negative in terms of hours of work.
OC. may be successful or may be unsuccessful depending on whether the income effect or the substitution effect from a wage…
You have two choices in jobs. Job A means you earn $70,000 a year, in an area where the average income is $80,000. Job B means you earn $60,000 a year in an area where the average income is $50,000. Assume all other factors such as housing quality, schooling, etc are the same. A "rational profit maximizer" would:
Have an indeterminate choice.
Be indifferent between the two wages.
Always choose the lower wage.
Always choose the higher wage.
Explain why janitors, construction workers, and nurses - whose jobs are essential - have salaries that are a tiny fraction of celebrities' salaries.
Chapter 14 Solutions
Microeconomics (9th Edition) (Pearson Series in Economics)
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