Questions:
For full credit show any mathematical computations used and attach pertinent website reports highlighting any data used--only the relevant pages of the report are necessary, not the whole report. A screenshot is also acceptable.
1. Using the numbers in the table below, calculate the missing cells and answer the questions below.
Units
of
Labor
Total
Product
(TP)
Marginal
Product
(MP)
Wage
(AWC)
Product
Price
Total
Revenue
(TR)
Marginal
Wage
Cost
(MWC)
Value of
Marginal
Product
(VMP)
Marginal
Revenue
Product
(MRP)
1 25 10 8 10 200
2 55 20 7 30 185
3 25 30 6 480 150
4 10 40 5 450 50
5 95 50 4 -70
6 92 60 3 -104
a. Over what range of labor is the firm experiencing diminishing or decreasing returns?
b. Using Table 6.3 in the text, what Product Market Structure is this firm operating in?
c. Using Table 6.3 in the text, what Labor Market Structure is this firm operating in?
d. Based on the data, how many workers will the firm hire to maximize its profits? How much profit will it earn at this level of employment? (Hint: profit = revenue-costs)
e. How many workers would society like to see employed by this firm?
2. Review Figure 7.1 in your text (components of total compensation) then visit the BLS website link provided here and using the report (table A, December 2013) complete the following:
a. Generate an identical pie chart (except for the percentages) for Private Industry. (excel or neatly drawn to scale will work)
b. Do the same as above, but this time use State and Local Government sector data.
c. Assuming compensation is identical in both the government and the private sector, which sector is providing a compensating wage differential for their relatively lower wage amenities.
3. Based on data from Forbes Magazine, in 2013 Robert Downey Jr. (actor), Tiger Woods (golfer), and Ralph Lauren (CEO), each received compensation exceeding $65 million dollars. Of these three, which one was most likely compensated less than their Marginal Revenue Product (MRP)? Why?
4. Assume that the occupational distribution of males and females is as follows.
a) Calculate the Index of Segregation. What does the resulting number mean?
b) Does this index alone indicate gender discrimination? Why or why not?
5. Using Table-1 of the Census Bureau Income and Earnings Summary Measures by Selected Characteristics: 2011 and 2012, answer the following
a. Which "Type of Household" had the highest and lowest median income in 2012? What are the figures?
b. Which "Race Origin of Householder" had the highest and lowest median income in 2012? What are the figures?
c. Which "Age of householder" had the highest and lowest median income in 2012? What are the figures?
d. Which "Region" had the highest and lowest median income in 2012? What are the figures?
6. Visit the following BLS website illustrating the wage and employment statistics from May 2013 and perform the following operations
a. Sort all occupations by annual mean wage. What industry are the top 10 highest paying occupations in? What level of education do they all require?
b. What industry is most represented in the bottom 10 (ignore the ones without data) and what level of education do they require?
c. Click on the occupation labeled "Lawyer" and fill in the bell curve below with the hourly wage data provided.
Occupation Male Female
A 60% 5%
B 20% 5%
C 10% 40%
D 10% 50%
d. Based on the completed bell curve what is the probability of a randomly selected attorney making more the 90th
percentile?
e. Which of the following characteristics will most differentiate those in the middle 50% from the top 10%
i. D-factor
ii. Formal education
iii. Experience
iv. Passing the Bar
v. Work effort
f. Locate the anticipated occupation you are going to compete in once graduating college. Create a similar bell curve based on the same BLS data. Once complete, Using the answers from "e" above, write one sentence for each indicating what you will need to do to enter the 90th percentile for your occupation.
7. Evaluate the following statement and provide an educated opinion on the argument. This is a normative evaluation so you will not lose points for taking a position but to get points you need to substantiate your argument with economic theory, and if desired, empirical data.