Question

14. In the Cobweb model, if wages for plumbers are relatively high now, and it takes 6 months to train as a licensed plumber a) We would expect an increase in supply of plumbers 6 months from now b) We would expect an increase in demand for plumbers 6 months from now o) We would expect increases in supply and demand for plumbers 6 months from now ) Supply of plumbers and demand for plumbers would not change s. In the Cobweb model, if wages for plumbers are relatively high now, and it takes 6 months to train as a plumber, a) We would expect an increase i n wages for plumbers6 months from now b) We would expect a decrease in wages for plumbers 6 months from now, followed by a reduction in the number of people training to be plumbers months from now months from now, followed by another increase in the o) We would expect no change in wages for plumbers 6 d) We would expect an increase in wages for plumbers 6 number of people training to be plumbers 16. The age earnings profiles for immigrants relative to natives shows that a) Earnings for immigrants rise more quickly than for b) Earnings for natives rise more quickly than for o) Different immigrant cohorts have differing skill sets, so natives over their working lives immigrants over their working lives the cross section of current immigrants hides the true age earnings profile that exists for each cohont d) Immigrants always earn less than natives, regardless of skills 17. The value of a statistical life can be calculated by a) Dividing the probability of death by the b) Dividing the compensating wage differential by the c) Multiplying the compensating wage differential by the ) Summing the compensating wage differential and the wage differential probability of death probability of death probability of death

Answer 1

Solution:

14. In the cobweb model, if pages of plumbers are relative high, more number of people will get attracted to enter this job. As a result, more people will go for the 6 months training of license plumber. After 6 months, this, supply of plumber is expected to increase. This will not effect the supply side of the market. So, correct option is (A).

15. Continuing the above model, as the supply of plumbers will increase 6 months from now, without change in demand side, this will result in lowering the wages due to such excess supply. As price of plumber service reduces, this line becomes less attractive and so less number of people will go for its training. So, correct option is (B).

16. This one is pretty direct. The age earning profiles simply denotes how wage behaves as a person becomes older. The age earning profiles for immigrants relative to natives shows that, as denoted by various data studies, earnings for natives rise more quickly than for immigrants over their working lives (due to biasness of a nation towards it's own citizens). So, correct option is (B).

17. Value of statistical life (VSL) = wage differential/increased probability of death

So, VSL is clearly, dividing the compensating wage differential by the probability of death. So, correct option is (B).