Answer Happy

words. Please show your work #1. (5 points) Chapter Nine N V, = E- E (1 -2 (1 + i)" Use the variables in Equation (9.1) See above to cite at least two reasons why it may be rational for a family to migrate from one part of the country to another, even though the hypothetical move produces a decline in family earnings in the first year of work following the move #2. (10 points) Chapter Ten a. Assume that is union's utility depends on only the wage rate and not the level of employment. In this case, what will be the outcome under the efficient contracts model? b. How can both n union and a firm be better off by bargaining over the wage rate and employment rather than just the wage rate? c. Are strikes inefficient for n union and firm? Explain

earnings potential in the destination aren may be higher than in the present location. Equation (9.1)-a modification or Equation (4.3) in Chapter 4 gives the niet present value of migration: V - ΣΕΕ- Στε -Z. where V, = present value of net benefits E carvings from new job in year E = earnings from existing job in your N = length of time expected on new job 1 Interest rate (discount rate) = year in which benefits and costs accrue Cdirect and indirect monetary costs resulting from move in the year Z-net puychie costs of move (psychic costs minus psychic guins In Equation (9.1), i , > 0, implying that the expected earnines gain exceeds the combined monetary and net psychic Page 24 Investment costs, the person will migrate. Il conversely. V <0. the person will remain in his or her present job and location All else being equal, the greater the annual carning differential (E - E between the two jobs, the higher will be the present value of the net benefits (V.) and the more likely it will be that an individual will migrate