The Economics Of Macro Issues 8th Edition Roger LeRoy Miller, Daniel K. Benjamin - Solutions

Unlock a comprehensive understanding of "The Economics Of Macro Issues 8th Edition" by accessing our expertly crafted solutions. Our online answers key provides detailed solutions, offering a step-by-step guide to each question and answer in the textbook. Whether you're looking for a solution manual or solved problems, our platform offers a free download of the solutions PDF. With a robust test bank and chapter solutions, students and instructors alike can benefit from our instructor manual. Explore our textbook resources and enhance your learning experience with precise and concise answers.

Why is it that teenagers (rather than members of any other age group) are most likely to lose their jobs (or get turned down for employment) when the minimum wage is raised?
Even without a minimum wage, the unemployment rate would almost surely be higher among teenagers than among adults. Sug- gest at least two reasons why this is so.
Is it possible that a higher minimum wage could ever increase employment?
Why do you think organized labor groups, such as unions, are sup- porters of a higher minimum wage, even though all of their members earn much more than the minimum wage?
Are there methods other than a higher minimum wage that could raise the incomes of low-wage workers without reducing employ- ment among minority youngsters?
Are teenagers better off when a higher minimum wage enables some to earn higher wages but causes others to lose their jobs?
Refer back to the last question. Based on the discussion in the chapter, what would you want to know about these women to satisfy yourself that they will be at least as productive as the men? List the key factors and explain briefly.
Suppose you own a company. If you hire ten men, each of them at $70,000 per year, your firm will be able to sell $1,000,000 in output this year, and you will be able to earn $50,000 in profits, an amount that is normal for a firm of your size in your industry. (Your firm's other costs, such as for
Why do you think we have laws that prohibit discrimination in pay based on gender or race but permit employers to discriminate in pay based on education or experience?
Women who own their own businesses earn net profits that are only half as large as the net profits earned by men who own their own businesses. First, consider why women would be willing to accept lower profits. Could this reflect poorer options for women as employees? Alternatively, could it
A recent British study found that married men earned more than unmarried men, but only if their wives did not have full-time paid employment. Suggest an explanation for this finding. (Hint: In which case is a man more likely to share in the household responsibilities, including child care?)
Suppose an employer offers a base wage of $20 per hour for the first forty hours of work each week and overtime pay of $30 per hour for any hours beyond forty per week; the employer allows workers to choose their own hours of work. Suppose employee A chooses to work thirty-six hours per week and
Some observers have proposed higher income and wealth taxes on the wealthy. Given that one's wealth generally depends primarily on how much output one produces, how do these taxes affect the incentives of people who are the most productive? Assume that the proceeds from the taxes are given out to
If you play poker with a group of friends, you are playing what is called a zero-sum game. What you win, they lose and vice versa. The sum of the funds that you start with together does not change. All that changes is who owns more or less of that sum at the end of your poker game. Many
Today, usually at little or no cost, you can Skype your friends and family, no matter where they are located. Are you both psychologi- cally and economically richer? Why or why not? Similarly, you can follow the lives of the rich and famous via their Twitter feeds, their blogs, or their Facebook
In 1984, individual balances in private retirement plans were $865 billion. By thirty years later, they had risen to almost $25 trillion. In general, balances in private retirement plans are not included in the statistics that show rising income or wealth inequality. How might such an oversight
When the capital gains tax rate was reduced from 28 to 20 percent in 1997 and especially when it was cut again to 15 percent in 2003, many people believed that these reductions would be temporary. How did this belief affect the incentives to sell assets when the tax rates were cut, compared to a
Does envy of those who are rich depend on the source of that wealth? For example, consider two people who are both equally rich. One of them worked eighty hours a week year after year to accumulate her wealth, while the other won the lottery. Would the envy felt by others toward each of these
How does the percentage of voters who are renters (as opposed to owners) affect the incentives for politicians to propose rent con- trols? Does this incentive depend on the likelihood that renters are less likely to vote in local elections than owners of apartments and houses? Why do you suppose
Because rent controls reduce the rental price below the market clear- ing price, the quantity of rental units on the market must decline. What does this imply must happen to the full cost of renting an apartment including "key money," harassment by the landlord, and so forth? Explain.
Why do the owners of rental units reduce their maintenance expen- ditures on the units when rent controls are imposed? Does their decision have anything to do with whether they can afford those expenditures?
Who, other than the owners of rental units, loses as a result of rent controls? Who gains from rent controls? What effect would the imposition of rent controls have on the market price of an existing single-family house? What effect would rent controls have on the value of vacant land?
What determines the size of the key-money payments that landlords demand (and tenants offer) for the right to lease a rent-controlled apartment?
Why do you think governments frequently attempt to control apart- ment rents but not house prices?
Referring back to the facts of the previous question: Suppose you knew that in one community water is supplied by a privately owned company, while in the other community water is supplied by the local government. In which community do you predict that water is supplied by the privately owned
Consider two otherwise identical communities; call them P and N. Suppose that in P, all homes, apartments, and businesses have meters that record the usage of water. In addition, the users of the water must pay more when they use more water. Thus, water is priced like most other goods. In community
If allocating water through nonprice measures generally harms soci- ety, can you suggest why governments often do this?
During the droughts that periodically plague California, farmers in that state are able to purchase subsidized water to irrigate their crops, while at the same time many California homeowners have to pay large fines if they water their lawns. Can you suggest an explanation for this difference in
Evaluate the following: "Although taxpayers foot the bill for fed- eral water sold to farmers at subsidized prices, they also eat the crops grown with that water. Because the crops are cheaper due to the subsidized water, taxpayers get back exactly what they put in, and so there is no waste from
How much water do people "need"? Is your answer the same if you tine have to pay their water bills?
The United States currently has an "opt-in" system for organ dona- tions from the deceased: People must explicitly choose postmortem donation ahead of time (as when they obtain their driver's licenses). Many other nations have "opt-out" systems: A desire to donate post- mortem is presumed to exist
The average waiting time on transplant lists is about five years for kidneys (although this is expected to rise sharply due to the rising incidence of diabetes, a major cause of kidney damage). Many of these people waiting must undergo dialysis, at a cost of $90,000 per year for the dialysis, plus
If payment for organs drives up the financial costs of transplants compared to the costs of dialysis, is it possible that private insur- ance companies, and even Medicare and Medicaid, might respond by changing their standards for transplants? Could the standards change in different directions
Why might the owners of the private insurance companies that pay for most organ transplants (but don't pay for most dialysis) be in favor of a system that prohibits paying for a donated organ? Should the taxpayers of the United States, who ultimately cover the cost of Medicare and Medicaid
Per capita income varies substantially across the country. If there were a free market in which payment for kidneys was permitted within the United States, would you expect there to be different prices in different parts of the country? In which areas of the coun- try would you expect the most
The financial burden of organ transplants tends to be borne more heavily by private insurance companies, while the financial burden of dialysis is borne more heavily by the taxpayer (through fund- ing for Medicare and Medicaid). Instituting payments for kidney donors would likely save each taxpayer
The inflation- and quality-corrected prices of just about every tech- nological device have fallen dramatically. The prices have gone down and the quality has gone up for flat-screen TVs, smartphones, tablets, and gaming computers, among others. Few will argue that we are worse off because of
The U.S. Department of Agriculture publishes nutritional guidelines, and the Affordable Care Act mandates calorie counts on menus. Yet the federal government also subsidizes the production of foods that end up causing Americans to violate those guidelines and consume calories that contribute to the
We all undertake risks throughout our lives. When we pass a car on a two-lane highway, we implicitly know that we are increas- ing the risk of an auto accident, yet we do it anyway. When we drive faster at any time while driving, more often than not, we implicitly increase the risk of suffering
If you compare the actual physical size of a dress in 1950 that was labeled size 6 with a dress labeled size 6 today, you will notice a difference. What do you think that difference is? Why have dress manufacturers changed their size-labeling system? Similarly, if you look at the sizes of men's
Who benefits the most from menu mandates-caloric labeling of food in restaurants and vending machines-and why? Are there any costs associated with menu mandates? If so, what are they?
Obesity and smoking are both linked to numerous adverse health consequences, including heart disease, cancer, and strokes, among others. The Affordable Care Act permits health insurance companies to charge people higher premiums if they smoke or are obese. But the law forbids the companies from
According to the Surgeon General of the United States, nicotine is the most addictive drug known to humanity, and cigarette smoking kills perhaps 300,000-400,000 people per year in the United States. Why then isn't tobacco illegal in America?
The markets for prostitution in Nevada and New Jersey have two important differences: (i) prostitutes in New Jersey face higher costs because of government efforts to prosecute them and (ii) customers in New Jersey face higher risks of contracting diseases from prosti- tutes because the illegal
During Prohibition, some speakeasy operators paid bribes to ensure that the police did not raid them. Would you expect the quality of the liquor served in such speakeasies to be higher or lower than in those that did not pay bribes? Would you expect to find differences (e.g., in income levels)
The federal government currently taxes alcohol on the basis of the 100-proof gallon. (Alcohol that is 100 proof is 50 percent pure ethyl Malcohol; most hard liquor sold is 80 proof, or 40 percent ethyl alco- hol, whereas wine is usually about 24 proof, and most beer is 6-10 proof.) How would
In recent years, about twenty states have passed so-called medical marijuana laws. Typically, these laws permit individuals to lawfully purchase marijuana from licensed stores, provided they have a letter from their doctor recommending its use. In a number of these states, the price of medical
From an economic perspective, is it possible for laws restricting dan- gerous or destructive activity to be too strict? Explain. (Hint: Revisit Chapter 3.)
Almost all privately owned resources are closed access. Many (perhaps most) government-owned or -controlled resources are open access. Can you suggest any explanations for this observation? Explain.
It is generally acknowledged that more people would like to attend the Super Bowl each year than in fact attend. (Presumably, many people stay away due to the high cost of the tickets, which are priced at many hundreds of dollars apiece.) Suppose a law were passed specifying that people who wished
Some nominally closed resources are effectively open access. For example, to gain entry to Yellowstone National Park by automo- bile, one must pay a fee of $25. But during the popular summer months, at this price, far more people want to drive into the park than can be readily accommodated by its
Referring back to the last question, raves and education are both goods. That is, people typically prefer more of each to less. Do you think it is proper that people may not hold raves in the room when your class meets? Can you suggest a general principle that could guide university administrators
Explain the sense in which your classroom is an example of a closed access resource. Discuss what would happen to the quality of your education if access to the room were open-in the sense that anyone could come in during class time and, say, have a rave.
Is access to the house or apartment in which you live open or closed? If it is currently a closed access resource, how would it likely be treated differently if it were converted to an open access resource- one that anyone could use at any time in any way she chose? Explain.
If the crucial factor determining a country's low standard of living is the adverse set of legal and cultural institutions it possesses, can you offer suggestions for how the other nations of the world might help in permanently raising that country's standard of living?
In light of your answer to question 4, how do you explain that in some countries there is widespread political support for government policies that expropriate resources from some groups for the purpose of handing them out to other groups?
Consider two countries, A and B, that have identical physical endow- ments of a key natural resource. In country A, any profits made from extracting that resource are subject to confiscation by the govern- ment, while in country B, there is no such risk. How does the risk of expropriation affect
Both Louisiana and Quebec have systems of local law (state and provincial, respectively) that are heavily influenced by their com- mon French heritage, which includes civil law. What do you pre- dict is true about per capita income in Louisiana compared to the other U.S. states, and per capita
Most international attempts to aid people living in low-income nations have come in one of two forms: (i) gifts of consumer goods (such as food) and (ii) assistance in constructing or obtaining capital goods (such as tractors, dams, or roads). Based on what you have learned in this chapter, how
Go to a source, such as the CIA World Factbook or the World Bank, and collect per capita income and population data for each of the nations listed in Table 4-1. Compare the average per capita income of the common law countries with the average per capita income of the civil law countries. Based on
Professional football teams sometimes charter airplanes to take them to their away games. Would you feel safer on a United Airlines plane that had been chartered by the Washington Redskins than on a regu- blularly scheduled United Airlines flight?
Many economists would argue that private companies are likely to be more efficient than the government at operating airlines. Yet many economists would also argue that there is a valid reason for the government to regulate the safety of those same airlines. Can you explain why the government might
Many automobile manufacturers routinely advertise the safety of their cars, yet airlines generally do not mention safety in their adver- tising. Can you suggest an explanation for this difference?
Is safety likely to be a "normal" good (i.e., something people want to consume more of as they get richer)? Use your answer to this question to predict likely safety records of airlines based in North America and Europe, compared to those based in South America and Africa. Then go to
Suppose it is possible to observe (or measure) four attributes of airlines: (i) the size of their planes (measured in passenger-carrying Incapacity), (ii) the experience levels of their pilots, (iii) the age of their planes, and (iv) the length of the typical route they fly. Which airlines would be
Is it possible to be too safe? Explain what you mean by "too safe."
What are the innovations from the last five years that you think are the most important in your life and why? Can you put a rough dollar value on the personal loss you would suffer if these innovations had not occurred, perhaps because they were suppressed or discouraged by government policies?
Suppose you are about to start an innovative, high-tech company in one of two states. You expect before-tax profits to be about $100,000 per year. Both states have similar living conditions, climate, and other amenities, but the tax rate in state A is 17 percent, while the tax rate in state B is 7
Why does it matter to you if the long-run economic growth rate falls from its historical 2.1 percent to, say, only 0.9 percent? How does your answer differ depending on whether you are looking ahead to the end of this year or are looking ahead to the entirety of your work- ing career?
Are those resources that are spent on R&D but do not yield profit- able innovations wasted? Why or why not?
Why is it true that inventions are "a dime a dozen"?
If you had the choice of living today or one hundred years ago, which would you prefer and why? What about the choice between now and one hundred years in the future?
Suppose for simplicity that both Type I and Type II errors resulted in deaths only. Keeping in mind that too little caution produces Type I errors and too much caution produces Type II errors, what would be the best mix of Type I and Type II errors?
What would be the advantages and disadvantages of a regulatory system in which, rather than having the FDA permit or prohibit new drugs, the FDA merely published its opinions about the safety and efficacy of drugs and then allowed physicians to make their own decisions about whether or not to
How could the incentives provided to the FDA be changed to reduce the incidence of Type II errors? (Hint: Is it possible to comparethe FDA approval process with the drug-approval process in other nations?)
Does the structure of the drug industry have any bearing on the types of errors that drug firms are likely to make? That is, would a drug industry made up of numerous highly competitive firms be more or less likely to introduce unsafe drugs than an industry consisting of a few large firms?
Why don't FDA employees accurately balance the marginal benefits to drug consumers against the marginal costs to those consumers?
Why don't individuals simply force the FDA to do what is best for consumers of prescription drugs?
Keeping in mind the key propositions of globalization outlined in this chapter, what is the likely impact of international trade restrictions on the following variables in the United States: employment, the unemployment rate, real GDP, and the price level? Explain your responses.
Until a few years ago, U.S. cars exported to Japan had the driver controls on the left side (as in the United States). The Japanese (like the British), however, drive on the left side of the road, so Japanese cars sold in Japan have the driver controls on the right side. Suppose the Japanese tried
For a number of years, Japanese automakers voluntarily limited the number of cars they exported to the United States. What effect do you think this had on Japanese imports of U.S. cars and U.S. exports of goods and services other than automobiles?
In a wealthy country, wages are high not only in the traded goods and services sector but also in the non-traded goods and services sector.Why? (Hint: Are there two separate labor markets or just one?)
Why does McDonald’s provide a six hundred-page manual to the company’s franchises in every country? (Hint: What are the ways that any franchisor can monitor the quality of its franchisees?)
Is there anything that a Big Mac preparer in a developing country can do to earn a higher real wage rate?
If the same amount of materials and the same methods are used to produce Big Macs in over one hundred twenty countries, why are the prices of Big Macs not all the same, expressed in dollars?
Why don’t the local prices of restaurant meals, haircuts, and gardening services affect a country’s exchange rate?
Assume you are going to take a trip to Paris. You buy euros at your local bank or at the airport. Then you start spending them once you are in Paris. Every time you buy something there, you explicitly or implicitly translate the euro price into dollars. Often, you might say to yourself, “How do
What would happen to Greece if it pulled out of the Eurozone and went back to using its former national currency, the drachma?
What makes almost all government politicians everywhere in the world continue to spend more than is collected in taxes?
What are the benefits to the nineteen Eurozone countries of having a common currency? (Hint: What are the benefits of the fifty states using dollars, rather than fifty separate monies?)
If labor costs are extremely high in one country compared to another, what is the usual mechanism that allows the high-cost country to still be competitive in its export markets?
Why would international bond buyers be willing to purchase government bonds from Greece, Spain, Portugal, and Italy when there appears to be some risk that those governments will not be able to pay back those loans?
Why would a government continue to borrow if it knew it could never pay back all of the loans, including interest?
What do you think happened to the value of the U.S. dollar when BMW (a German company) moved an important part of its manufacturing facilities to the United States some years ago? Explain.
Why do politicians worry about whether the dollar is “strong” or“weak”?
From shortly after World War II to the early 1970s, the United States(like many countries) was on a system of fixed exchange rates. That is, the U.S. government pledged to take whatever actions were necessary to keep the value of the dollar fixed relative to other currencies.Consider the emergence
Sometimes national governments decide that they want their currencies to be more valuable than they currently are. Explain how, if a country wants to raise the value of its currency in foreign exchange markets, it might use the following tools to do so:a. Altering the rate of growth in its money
In an effort to discourage drug smugglers from using U.S. currency in major drug deals, the U.S. government refuses to issue currency in denominations greater than $100. How does this policy decision affect the demand for dollars and thus the exchange rate between the dollar and other currencies,
Although Denmark is a member of the EU, it does not use the euro as its monetary unit. Instead it uses the krone. If Denmark decided to switch from the krone to the euro, how might this decision affect the value of the euro in foreign exchange markets?
If cryptocurrencies make illegal hacking more profitable, facilitate trade in illegal drugs, and enable terrorists to move funds around the world more securely, is it possible that these new means of payment could actually make society as a whole worse off? Be sure to consider the offsetting

Showing 1400 - 1500 of 1798

First
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

The Economics Of Macro Issues 8th Edition Roger LeRoy Miller, Daniel K. Benjamin - Solutions

Step by Step Answers