ProblemSet_4

ProblemSet_4 - ILRLE 240 Economics of Wages Employment Fall...

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CONTINUED ILRLE 240: Economics of Wages & Employment Professor Matthew Freedman Fall 2008 Problem Set IV 1. During his presidency, Ronald Reagan proposed lowering the minimum wage (which then stood at $3.35 per hour) during the summer months for teenagers. Reagan contended that doing so would boost employment among teenagers and help them to gain valuable work experience. The argument that lowering the minimum wage would improve the welfare of a group relies on what assumption regarding demand for low-skilled or inexperienced workers? 2. Graduate students employed as teaching and research assistants at several universities in the U.S. have recently tried to unionize in efforts to gain some leverage over school administrators in bargaining over compensation. (a) Discuss the conditions under which unionized graduate students are most likely to be successful in winning pay increases without suffering large declines in employment. (b) Suppose that the cross-price elasticity of demand for graduate students and undergraduate students for use as teaching and research assistants is positive. Based on this fact alone,
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This note was uploaded on 01/24/2009 for the course ILRLE 2400 taught by Professor Smithr during the Fall '07 term at Cornell.

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ProblemSet_4 - ILRLE 240 Economics of Wages Employment Fall...

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