J. Edward Taylor Spring 2019 1 WRITE YOUR NAME HERE: __________________________________ ARE 150 Agricultural Labor Final Exam You must work completely independently and show your work. All questions or sub-questions are worth 5 points unless indicated otherwise. In Questions 1-7, please mark True or False. An answer should be considered False if it is not necessarily true. 1.In Todaro’s model, a person will never migrate if the urban wage is lower than the rural wage. ____X___ True _______ False 2.An increase in the farm wage makes an agricultural household worse off. _______ True ___X____ False 3.An increase in the farm wage makes an agricultural household better off. _______ True ___X____ False 4.The Agricultural Labor Relations Act (ALRA) was important federal legislation giving farm workers the right to organize and bargain collectively. ___X____ True _______ False 5.Economic research shows that farmworkers in the United States are becoming more willing to engage in follow-the-crop migration. _______ True ____X___ False 6.Fewer agricultural workers are in unions today than in the 1970s. ___X____ True ________ False 7.Research shows that bringing more farmworkers into the US from Mexico under the H-2A program promises to be a long-term solution to farm labor shortages. _______ True ___X____ False CONTINUE ON TO NEXT PAGE →
J. Edward Taylor Spring 2019 2 Questions 8 and 9 refer to the following: Gabriel is a farm labor contractor with an excellent crew of workers. He also has good friends at Walmart and a new business idea. Instead of selling harvesting services to Annie, an organic peach farmer, he plans to pay Annie for all the estimated Qpounds of harvestable fruit on her trees, pick the fruit, and sell it to Walmart at a price of $2 per pound. An average worker can pick 150 pounds of fruit per day. Assume the crew picks all of the harvestable fruit. 8.What is the implicit price of fruit on the tree—that is, the most that Gabriel should be willing to pay Annie per pound of fruit: a.If the fully loaded cost of a harvest worker (wage, payroll taxes, and just enough profit to make hiring the worker worthwhile) is $150/day? The solution to this problem is basically asking you to calculate the maximum profit that Gabriel could make given his production costs and the $2 price he is able to sell the peaches for. This maximum profit is the most he should be willing to pay because if he pays more, then he will lose money. He has to pay $150 per worker, but each worker can harvest 150 pounds. As such, his per-pound cost of picking fruit can be found by using the following formula: $150150𝑙𝑙𝑙𝑙𝑙𝑙.