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Unformatted text preview: Practice Questions to accompany Mankiw & Taylor: Economics 1 Chapter 19 1. Within each of the following pairs of workers, which worker is likely to earn more and why? (It may be obvious which one is paid more. The real issue is to explain why one is paid more than the other.) a. A carpenter working at the top of a 600-foot cooling tower of a nuclear power plant or a carpenter who frames houses? Answer: The carpenter working at the 600 foot height because he/she will likely require a compensating differential for the danger of the job. b. A shop assistant in a supermarket store or a lawyer? Answer: A lawyer because the lawyer has greater human capital from years of education and the lawyer requires a compensating differential to compensate for the cost and effort of becoming educated. c. A lawyer with one year of experience or a lawyer with six years of experience? Answer: A lawyer with six years of experience because work experience is part of human capital. d. A worker in a car factory who works the day shift or a worker in a car factory who works the night shift?...
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This note was uploaded on 07/06/2009 for the course BUS BAM303 taught by Professor Na during the Spring '09 term at 東京大学.
- Spring '09