laborexam2f02

laborexam2f02 - Midterm 2 This test is a mixture of short-...

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Economics 421 Fall 2002 Lich-Tyler Midterm 2 This test is a mixture of short- and long-answer questions. Answer them in the space provided. There are ten short-answer questions worth 4 points apiece. There are four long-answer questions worth 15 points apiece. The space provided should be sufficient to answer each question. If you must use more space, clearly indicate that the answer is continued onto the back side of the page. Pace yourself carefully, and good luck. Short answer questions (20 minutes) 1. Name the two types of training that a worker can receive after school, and explain the difference between them. 2. Mr. Goblin is debating whether to become a plumber. Assume that he lives for only two years, and that without training, he would receive $20,000 in each year. If he goes to vocational school, he spends a year in training and pays $10,000 in tuition; in the following year, he would earn $60,000. At what interest rates would he be willing to undertake the training? 3. Explain the basic prediction of “bargaining models” of joint decision-making. 4. Explain the theoretical effects of a minimum wage on employment and wages of workers in the sector of the economy covered by the wage. 5. What is the primary difference between labor demand in the short-run and in the long-run ? Which is more elastic?
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6. Explain the requirement for educational “signaling” to be able to distinguish between high-skill and low-skill workers.
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laborexam2f02 - Midterm 2 This test is a mixture of short-...

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