The poverty line in the country of Equalia is $10,000. Thedistribution of income
ID: 1229223 • Letter: T
Question
The poverty line in the country of Equalia is $10,000. Thedistribution of income for Equalia is as follows:
Number of Families
Income
200
less than $5,000
300
between $5,000 and $10,000
500
between $10,000 and $15,000
700
between $15,000 and $20,000
100
over $20,000
The poverty rate in Equalia is
11.1 percent.
16.7 percent.
27.8 percent.
55.5 percent.
Suppose that an employer hires workers with blue eyes andworkers with brown eyes. Each type of worker has the sameproductivity. Which of the following is correct if the employerdiscriminates by offering blue-eyed workers lower wages thanbrown-eyed workers?
The employer will be just as efficient as a nondiscriminatingemployer.
The employer will face higher costs than firms that focus onlyon maximizing profits.
The employer will immediately go out of business becausediscrimination is illegal.
Both a and b are correct.
How does the theory of efficiency wages explainabove-equilibrium wages?
Employers are forced to pay higher wages in efficientmarkets.
Employers give their workers a higher wage in the hope that itwill lead to increased productivity.
Workers get higher wages when they prove they are increasingtheir productivity.
Workers demand higher wages to compensate for poor fringebenefits.
The poverty line in the country of Equalia is $10,000. Thedistribution of income for Equalia is as follows:
Number of Families
Income
200
less than $5,000
300
between $5,000 and $10,000
500
between $10,000 and $15,000
700
between $15,000 and $20,000
100
over $20,000
The poverty rate in Equalia is
11.1 percent.
16.7 percent.
27.8 percent.
55.5 percent.
2)Suppose that an employer hires workers with blue eyes andworkers with brown eyes. Each type of worker has the sameproductivity. Which of the following is correct if the employerdiscriminates by offering blue-eyed workers lower wages thanbrown-eyed workers?
The employer will be just as efficient as a nondiscriminatingemployer.
The employer will face higher costs than firms that focus onlyon maximizing profits.
The employer will immediately go out of business becausediscrimination is illegal.
Both a and b are correct.
3)How does the theory of efficiency wages explainabove-equilibrium wages?
Employers are forced to pay higher wages in efficientmarkets.
Employers give their workers a higher wage in the hope that itwill lead to increased productivity.
Workers get higher wages when they prove they are increasingtheir productivity.
Workers demand higher wages to compensate for poor fringebenefits.
Explanation / Answer
Poverty is number of families making less than $10K (500) dividedby total number of families (1800). 5/18 = 27.8% The employer will faced higher costs because lower wages based ondiscrimination does not maximize a profit maximizationstructure. Emmployers give higher wages hoping it will lead to increasedproductivity. At above-equilibrium, none of the other answers makesense. If the worker was already working harder, the wages wouldcurrently be below-equilibrium or at equilibrium. If you need any more explanation or help, feel free to message me.
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