Computers become even more complicated c. to operate. Each of the following obse

Question

Computers become even more complicated c. to operate. Each of the following observations, ceteris paribus implies something about a particular labor market. For each one, (1) identify the relevant labor mar- ket; (2) state whether you expect the wage rate in that market to be higher than otherwise, or lower than otherwise; and (3) identify which conceptual ex- planation for wage differences (among those discussed in the chapter) you are applying to reach your conclusion. a. Elevator repairers have a higher accident rate than S. b. People who work in New York City have to pay c. People like to work in New York City because d. It takes rare diligence, motivation, and practice to most other jobs. higher rent than other people. there is a lot to do there. become a concert pianist. Los Angeles has passed legislation requiring that fortune tellers become certified by the city. Office cleaning services don't like to risk hiring ex- convicts, because employers believe they are more likely to steal equipment than other employees. e. f. 9. [Appendix] The following gives employment and daily output information for Your Mama, a perfectly com- petitive manufacturer of computer motherboards. Number of Workers Total Output

Explanation / Answer

8) a) it is elevator mechanic labour market. Higher accident rate makes the job dangerous and workers have high reservation wage for such a job. Firm needs to pay higher to induce them to involve in risky job. Wages tends to rise in this labour market.

b) general labor market of a particular state is considered here. Wage rate tends to be higher when rents are higher. Firm has to provide house rent allowance which is a part of the salary.

c) again general labor market of a state is considered . Wages are lower in this case because supply of labour is high in New York as many people prefer to be in New York.

d) Artistic skilled labour market is considered. To become a pianist one needs to be highly skilled which increases wage as supply of such workers is not high.

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