Homework Set 1, Due 9/15.
1. (Problem 2.3 in text). Tom earns $15 per hour for up to 40 hours of work each week. He is paid
$30 per hour for every hour in excess of 40. Tom faces a 20 percent tax rate and pays $4 per
hour in child care expenses for each h
1.) a.) The ratio of the federal minimum wage to the average hourly manufacturing wage averaged
about 0.5 from 1950 to 1968. That is, a manufacturing job paid about 2 times as much as a
minimum wage job. Since 1968, however, the ratio has steadily fallen.
Economics of Labor
Home Work #5
1.) The worker must compare both present value of moving to Illinois. The worker will end
up moving if the present value of earnings in Illinois minus the cost of moving there
exceed the present val
Important Stuff for Midterm Exam Oct. 20, 2015
Chapter 2, labor supply
Calculation of labor force participation, unemployment rate, employment rate, as well as trends
in labor force participation rates.
Construction of indifference curves and budget lines
Chapter 3, Labor Demand
Less empirical than Chapter 2.
Production function: q = f(labor,capital)=f(E,K)
E=(hours per worker)times(number of workers)
Aggregation of heterogeneous labor and heterogeneous capital
Marginal product of labor = MP