All questions are based on the module resources and your textbook readings. For best results, give a detailed answer, mention your readings, use numbers and examples. Answer any 6 questions in each module.
- Explain how and why women’s and men’s roles at home and at work changed through history (hunting and gathering, agriculture, colonial period, early industrialization, up to today).
2. Define opportunity cost. What would be the opportunity cost of the following decisions?
- a. Kate takes a part-time job and the sacrifice of study time causes her GPA to fall from 4.0 to 3.0.
- b. You take a year off work in order to take care of a sick family member.
- c. You pay $60 for a cool restaurant meal.
- d. A lawyer who earns $80/hour takes 2 hours off to attend a free lunch.
3. Consider a decision by a couple whether to have a child (or one more child) or not
- a. List all costs of having a child, including opportunity costs.
- b. List the expected benefits of a child.
- c. If mom earns more than dad, who has lower opportunity cost of taking time off work to take care of a child, and why?
- d. Using your list of benefits and costs, explain why people in poor countries choose to have more children than people in wealthy countries.
4. The central assumption of economic theory is that humans are rational. Rational people make choices by comparing costs and benefits of various alternatives and selecting the one with the highest net benefits. Give one example of a rational cost-benefit decision you have made recently. Describe your costs and benefits. Are you a rational person?
5. Near my house, there is a fast-food restaurant that sells egg muffins for $1.99 apiece. At home, I have a fancy toaster-and-egg-steamer that can produce a virtually identical product. You slice and butter an English muffin, stick it into the toaster slots; scramble an egg, pour it into the egg steamer, and add water to the steamer. Altogether, it takes about 15 minutes of preparation and cleaning. Producing an egg muffin at home costs only around $0.50. Nonetheless, I often find myself stopping by McDonald’s instead. Is it rational to buy the same product for more money at McDonald’s? Explain the tradeoffs.
6. Does economic economic development have a positive effect on women’s labor force participation? Does economic development always lead to the expansion of women’s rights?
7. From a historical perspective, how has the labor market experience of black and white women differed in the US?
1. Suppose Clara can either make 12 pizzas or 4 cakes per day, while Karl can make either 5 pizzas or 10 cakes per day. Who has comparative advantage in pizza, and who in cakes? What are their opportunity costs of making one pizza? How can this couple gain by living together compared to living apart? Graph the two PPFs.
2. Using the concept of comparative advantage argue IN SUPPORT of the following statement: Spouses should not divide chores equally.
3. Using your knowledge of the costs of specialization, argue IN SUPPORT of the following statement: Spouses should divide chores equally.
4. Some people believe that women have a comparative advantage in housework whereas men have a comparative advantage in work for pay. What biological, psychological, historical or cultural differences between genders may justify this presumption?
5. Explain what is meant by household production. How much is it worth? How do economists estimate its value?
6. Describe the bargaining approach to decision making. Is this approach more realistic than the standard neoclassical model? Suggest some factors that would improve the bargaining power of married women.
7. Looking at a large sample of married households, an economist finds that husbands whose wives work earn less on average than husbands whose wives are not in the labor force. I then conclude that I should quit my job to boost my husband’s earnings. What is wrong with my economic analysis?
- Explain 3 types of unemployment and give examples of each. Find current official unemployment rate in the US and comment what type of unemployment likely dominates at this time.
2. Suppose you know the following about an economy:
- Population (working age) 120
- Labor Force 80
- Employed 70
- a. Find the labor force participation rate
- b. Find unemployment rate
- c. Assume in the problem above that 5 of the unemployed became discouraged workers. Calculate new official unemployment rate in this economy. Comment.
3. Suppose an economic downturn occurred. How would you expect this to affect the number employed, the number of unemployed, and the number of “not in the labor force”? Why would the unemployment rate be an incomplete measure of economic hardship and lost output?
4. What are some of the explanations for declining labor force participation among men? Do the same factors also reduce women’s labor force participation?
5. Use economic reasoning (economic theory) to explain why the labor force participation rate for married and single women might differ. In discussing this, think of economic factors that might shift the decision from “not in the labor force” to in the labor force.
6. Consider a family of 2 parents and 2 preschool children. The mother is currently not employed. Describe how the following government subsidies would affect her decision to work and the number of hours she chooses to work?
- a $5 per hour childcare subsidy for families with an employed mother.
- a $500 per month payment to all families with children.
7. Do you expect that sometime in the future labor force participation rates for men and women will be equal? Discuss.
1. Assume that the market for math teachers is in equilibrium with current wage rate $30/hour and 1,000 teaching hours are demanded/supplied at this rate. For each situation, draw a supply and demand diagram in the labor market for math teachers, mark equilibrium wage (PRICE of labor) and work hours (QUANTITY of labor), label your graph. Predict how the following event affects P and Q in the market for teachers (increase, decrease, or no change). Show the corresponding shift on your graph, mark the new equilibrium.
- a. Suppose more high school students are required to take math.
- b. Suppose fewer college graduates choose teaching as their occupation.
2. Think of the market for construction workers. Come up with 3 demand side and 3 supply side factors that can increase labor D and labor S in this market. How will these shifts affect wages of construction workers?
3. Which of the following is the BEST explanation of why some sports players earn astronomical wages? Explain your answer.
- Their physical abilities
- Their ability to attract a large audience
- The prestige of athletes, which appears to be higher than that of other occupations, such as teachers.
- The theory of labor markets cannot explain why some workers earn disproportionate wages
4. The theory of compensating wage differentials predicts that workers in “dangerous jobs” should be paid more than workers in “safe jobs,” everything else equal. However, if we look at data, we find that workers in risky jobs (farm workers, construction workers, etc.) actually earn less than workers in safe jobs (professionals, service providers, etc.) who work in more desirable work environment. What is the most likely explanation among the following? Explain why you chose a particular answer.
- employers have imperfect information and don’t select jobs wisely
- highly paid and poorly paid workers are in noncompeting groups
- firms with desirable working conditions are not hiring low skill labor
- the differential required to compensate for high skill exceeds the differential required for poor working conditions
5. Explain why some workers belong to unions. How does a union membership affect workers’ wages and job security?
6. Why did Henry Ford pay higher than market wages to his factory workers, and how could his business still be profitable?
- Give 3 economic arguments in favor of raising minimum wage to $15/hours.
8. Give 3 economic arguments against raising minimum wage to $15/hours.
- What is “gender pay gap” ? How big this ratio? Why is it hard to measure the gender pay gap? What are the explanations for this pay gap?
- Explain the term ‘occupational segregation’. What kind of jobs are segregated and why?
- Using the Occupational Handbook, find out what occupations are projected to grow the most in the next 10 years and which jobs are projected to decline. Offer your brief explanation for why these changes – why is the demand for certainly skills going up or down?
- The first column on the Occupation Handbook website shows occupation groups where you can click on a group and find descriptions of a dozen of jobs within each group with different wages. Which occupation groups (or which jobs within an occupation) have the highest earnings? What might be the explanations for high wages in this group?
- Women are less likely to be self-employed than men. Why?
- Describe some of the recent findings of the impact of a person’s name, appearance or sexual orientation (pick any) on his/her earnings.
- Give as many reasons as you can think of based on your readings and study resources, for why your classmate’s wage may be different from your wage.
- Suppose an employer offers a base wage of $20 per hour for the first 40 hours each week and overtime pay of $30 per hour for any hours beyond 40. Suppose A chooses to work 36 hours and B chooses to work 42 hours. Compute weekly earnings of employees A and B. Compute earnings gap in percentage terms between them. What might be possible reasons for this gap?
- What is human capital? Explain why economists say that accumulation of human capital a type of investment. Is personal spending on human capital always a good investment?
- Describe your decision to invest in education in terms of costs and benefits. Discuss monetary and non-monetary returns to a college degree, as well as the costs of a college degree.
- Explain how these situations would affect the cost-benefit analysis of going to college?
- a. Students now need 5 years instead of 4 to get a degree.
- b. The real earnings of college graduates increase while those of high school graduates stay the same.
4. Explain why women in the past used to invest less in their human capital and chose different occupations than men. List and explain as many factors as you can based on the textbook chapter and study resources.
5. Is education signaling or skill building? Explain both theories and share your opinion.
6. Describe the difference between general and job-specific training. Give examples of both. Is your employer more likely to pay for your general or job specific training?
7. It is claimed that employers are reluctant to hire women for some jobs because of their higher expected quit rates. Assuming women are more likely to quit, use human capital theory to explain what kind of jobs an employer would be especially reluctant to hire women for. Explain the reasons for the employer’s reluctance. How valid do you think such employer assumptions about women are today?
- Suppose the average wage of male employees in a firm is $25/h, and the average wage of female employees is $20/h. Do these numbers prove that the firm discriminates against women? What additional info would you need to determine if discrimination exists?
- Why do some researchers conclude that labor market discrimination against women is small while others find it to be large? What measured factors have been found to be most important in explaining pay differences between men and women?
- In the land of Chin there are two distinct and equally numerous peoples: Yins and Yans. The Yans have historically been stronger and more aggressive that the Yins. Both the Yins and Yans play paddle tennis, but paddle tennis tournaments have always been segregated by group because of the physical advantages of the Yans. The Yin do not object to paddle tennis tournaments being segregated, but recently have been upset about the fact that the top Yin players receive less than the top Yan players. You have been hired by the Chin Paddle Tennis Association (CPTA) to assess the market for paddle tennis players. CPTA have asked you a few questions given below.
- What is the most likely source of the wage differential between the Yin and Yan paddle tennis players?
- Is this discrimination as economists define the term?
- Is the wage differential likely to persist over time, or how do conditions in Chin have to change in order for the differential to disappear?
- Explain the term ‘statistical discrimination’. Provide an explanation other than discrimination that could account for the following group differences. (You do not need to agree with your explanation; just try to make it plausible).
- Married men without children earn more than single men
- People with criminal records earn less than other people with identical education and intelligence.
- Japanese-Americans earn more than other Americans.
- Teachers earn less than equally-educated bankers.
5. Explain how competition and profit motive can reduce or completely remove discrimination of workers by gender or race?
6. What government policies have been successful in reducing discrimination? Explain each briefly.
7. What is comparable worth, and how could it be applied in the labor market to reduce the gender pay gap? Discuss the arguments for and against applying such a policy nationwide.
- Based on your readings for this module, describe with numbers 5 recent trends related to marriage, divorce, cohabitation, children or family composition. What explains each of these trends?
- Based on all the readings from this module, make a detailed lists of benefits and costs of marriage. Explain each briefly.
- In what ways are marriage and cohabitation similar in terms of benefits/costs, and in what ways do they differ? Do same sex couples enjoy the same gains from marriage as opposite sex couples? Explain.
- How do economists explain marriage wage premium for men?
- Women’s rising labor force participation might either increase or reduce marriage rates. Explain why the effect could go either way. Does higher labor force participation of women have the same ambiguous effect on fertility?
- Over the last century, how did the benefits of marriage increase or decrease for men and women? What about the costs of marriage? (There is no correct answer, I am looking for your analysis)
- Children raised in mother-only families are on average at an economic and social disadvantage compared to those raised in two-parent families. Explain the major reasons why.
- What government policies help alleviate poverty in the US?
2. What are some of the family friendly policies provided by employers in the US?
3. Discuss the pros and cons of mandating that employers provide relatively long paid parental leaves of, say, one year.
4. What are some specific policies that might improve women’s well-being in the poorest countries? What are the difficulties and challenges entailed in undertaking them?
5. It has been argued that government investments in women’s education in developing countries result in societal as well as private benefits. Discuss each.
6. Women’s labor force participation rates in economically advanced countries vary considerably. What economic and noneconomic factors might help to explain this disparity?
7. Governments in some countries are concerned that fertility rates are too low, while in other countries, there is concern that fertility rates are too high. Explain the concerns raised in both situations, and what measures the respective governments might take to address them.