Discuss how workers who differ in their innate abilities sort themselves across piece rate and time-rate jobs. Also describe how
Learning Goal: I’m working on a economics multi-part question and need an explanation and answer to help me learn.
Chapter 11: Review question number 2
2. Discuss how workers who differ in their innate abilities sort themselves across piece rate and time-rate jobs. Also describe how the two compensation systems elicit different levels of effort from the workers
Problems number 11-2 and 11-12
11-2. Taxicab companies in the United States typically own a large number of cabs and licenses; taxicab drivers then pay a daily fee to the owner to lease a cab for the day. In return, the drivers keep their fares (so that, in essence, they receive a 100 percent commission on their sales). Why did this type of compensation system develop in the taxicab industry?
11-12. a. Personal injury lawyers typically do not charge a client unless they obtain a monetary award on their client’s behalf. Why? b. What would happen to the number of lawsuits if lawyers had to charge an hourly rate and could not charge a fixed percentage of the award?
Chapter 12: Review question numbers 1 and 2
1. Discuss some of the basic patterns of unemployment in the United States since 1960.
2. What are the differences between frictional and structural unemployment? Should we be equally concerned with all types of unemployment? Do the same policies help alleviate both frictional and structural unemployment?
Problems number 12-11 and 12-14.
12-11. Consider Figure 12-19 in the text. What happened to the unemployment rate in France, Germany, and Italy from 1970 to 2000? What do you think explains this pattern?
12-14. Unemployment insurance automatically stimulates the economy during an economic contraction, which is good from the workers’ point of view. From the firm’s point of view, however, the UI system can be overbearing on business during prolonged contractions. a. What is it about the UI system that generates these opposing views? b. How could the UI system be changed to also assist firms during economic contractions while not removing the benefits available to laid-off workers?
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