Assignment:
Describe the major sources of income and expenditures for households.
Problem 1) (Evolution of the household) Determine whether each of the following would increase or decrease the opportunity costs for mothers who choose not to work outside the home. Explain your answers...
a. higher levels of education for women
b. higher unemployment rates for women
c. higher average pay levels for women
d. lower demand for labor in industries that traditionally employ large numbers of women.
Problem 2) (tax rates) Suppose taxes are related to income as follows:
Income taxes
$1000.00 $200.00
$2000.00 $350.00
$3000.00 $450.00
a. what percentage of income is paid in taxes at each level?
b. Is the tax rate progressive, proportional, or regressive?
c. What is the marginal tax rate on the first $1000.00 of income? The second $1000.00? The third $1000.00?
Problem 3) (demand shifters) List five things that are held constant along a market demand curve, and identify the change in each that would shift the demand curve to the right- that is, that would increase demand.
For question 4 explain why a supply curve usually slopes upward
Problem 4) (Supply) Why is a firm willing and able to increase the quantity supplied as the product price increases?
Problem 5) (measuring unemployment) Suppose that the U.S non-institutional adult population is 230 million and the labor force participation rate is 67%.
a. What would be the size of the U.S. labor force?
b. If 85 million adults are not working, what is the unemployment rate?
Problem 6: (Types of unemployment) Determine whether each of the following would be considered frictional, structural, seasonal, or cyclical unemployment:
a. A UPS employee who was hired for the Christmas season is laid off after Christmas.
b. A worker is laid off due to reduced aggregate demand in the economy.
c. A worker in a DVD rental store becomes unemployed as video on demand cable service becomes more popular.
d. A new college graduate is looking for employment.
Problem 7) (the meaning of full employment) When the economy is at full employment, is the unemployment rate at 0%? Why or why not? How would a more generous unemployment insurance system affect the full employment figure?
1) (measuring labor productivity) How do we measure labor productivity? How do changes in labor productivity affect the U.S. standard of living?
Problem 8) (long term productivity growth) Suppose that two nations start out in 2013 with identical levels of output per work hour--- say $100.00 per hour. In the first nation labor productivity grows by 1% per year. In the second, it grows by 2% per year. Use a calculator or spreadsheet to determine how much output per hour each nation will be producing 20 years later, assuming the labor productivity growth rates do not change. Then determine how much each will be producing per hour 100 years later. What do your results tell you about the effects of small differences in productivity growth rates?
Problem 9) (technological change and unemployment) What are some examples of technological change that has caused unemployment? And what are some examples of new technologies that have created jobs? How do you think you might measure the net impact of technological change on overall employment and GDP in the United States?