Answer Happy

a) (5 pts.) Does the fact that women workers carn, on average, lower wages than men "prove the existence of labor market discrimination? Explain. b) (10 pts.) Explain the "means-coefficients" approach (i.e., the "Oaxaca method") to measuring wage discrimination c) (5 pts. What are the criticisms of this method? Explain each. 2) (20 points) Suppose Sally Simpson has an investment providing S100 per week in non-wage income and currently works in a job with a wage of $25 per hour. a) (5 pts.) Draw a budget constraint-indifference curve graph demonstrating that Sally maximizes utility working 30 hours per week. What is the slope of Sally's indifference curve at her utility maximizing point? b) (10 pts.) Suppose Sally gets a raise to S35 dollars per hour. Show Sally's new utility-maximizing point demonstrating that Sally's labor supply curve is upward-sloping. Given Sally's response to the wage change, can you say whether the substitution effect of the wage change was bigger or smaller than the income effect? Explain. C) (5 pts.) Suppose now that Sally's non-wage income disappears (she now has SO in non-wage income). Can you say whether Sally's hours of labor supplied will increase or decrease in response? Explain using the ideas of income and substitution effects 3) (10 points) Suppose the economy of the country Freedonia had 3 occupations: butcher, baker, and candlestick maker. Suppose that 40 percent of men were butchers, 40 percent of men were bakers and 20 of men were candlestick makers. Also, 10 percent of women were bakers, 70 percent of women were bakers and 20 percent were candlestick makers. a) (5 pts) Calculate the Duncan Index of Dissimilarity for Freedonia. b) (5 pts.) Provide a shift in the gender occupational distribution that would make the Index equal to zero. 4) (10 points) a) (5 pts) True, False, Uncertain: If the scale effect of wage change is larger than the substitution effect, then labor demand curves will be upward-sloping. Explain b) (5 pts.) True, False, Uncertain: An increase in the rental rate of capital will necessarily increase the firm's demand for labor. Explain