Midterm Essays Example

Multiple Choice Part

1)
This is due to a increasing of unemployment rate. As we know, in 2008 there was a global financial crisis which affects the economy of the U.S. The crisis has an impact on enterprises which were forced to shorten their productivity and labor forces. Thus, labor force participation rate has declined.
2)

A citizen of the country should work on the enterprise of this country (He should participate in GDP forming).

3)
This factor may be the dependence of wages from completed work. It can be, for example, a percentage of sales, piecework wages, etc.
4)

In this case the increase in wage involves the increase in the number of hours an average worker supplies.

5)
Optimal working time is the time during which the employee in accordance with the internal regulations and the terms of the employment contract must perform job duties, as well as other periods of time, which, in accordance with the laws and other normative legal acts related to working time. It is assumed that it brings maximum benefit to the enterprise.
6)

Option 1 will make workers to choose longer labor when:

30x>1000+20x10x>1000x>100
when the labor hours per month will be more than 100 h.

Option 2 will make sense if they decide to work less than 100 h per months

7)
This factor may be a state grants for training. For example, if there are not enough programmers, a government may provide grants for training students of this specialty.
8)

Such training program should be related to improving skills required to perform the employees’ duties better.

9)

The most obvious factor is inflation (it also affects the price of labor force)

10)
According to the law of supply, a producer is more likely to increase the scale of production when the price on this production is increasing.
11)
This may occur because in 1960’s the supply on labor force was bigger than demand. And till 1980’s the situation has changed – the demand of labor force became bigger than supply
12)

If scale effect is dominating the substitution effect, a decrease in wage likely to increase the demand for capital

13)
The factor is that the economy started to require more qualified workers and the demand on unskilled labor force has decreased.
14)
This is because in large city there are more enterprises and employers which compete for labor forces. Thus, they should offer high salaries to hire new workers.
15)
The wages of skilled workers began to grow, as increased global economic activity. Workers from countries where skilled labor was cheap began to leave in those countries where this work has become more expensive.

Analytical Part

Question 1
a)

The labor force participation rate is:

100150*100%≈66.67%
The unemployment rate is:
1- 85100*100%=15%
b)

Now there is the following number of employed workers:

85*0.8=68 million

The labor force is now:

100*0.85=85 million

The new labor force participation rate is:

85150*100%=56.67%

The new number of unemployment workers is:

85-68=17 million

Question 2

a)

If she refuses, then:

PV=20000(1+0.1)+200001+0.12+200001+0.13+200001+0.14+200001+0.15≈$75,815.74

If she agrees to learn Spanish:

PV=100001+0.1+400001+0.12+400001+0.13+400001+0.14+400001+0.15≈$124,358.74
b)

If she refuses, then:

PV=20000(1+0.9)+200001+0.12+200001+0.13+200001+0.14+200001+0.15≈$68,160.23

If she agrees to learn Spanish:

PV=100001+0.9+400001+0.12+400001+0.13+400001+0.14+400001+0.15≈$120,530.99
c)

She willing to pay now to get the education before her husband became unemployed:

10000(1+0.1)=$9090.9

After it:

10000(1+0.9)=$5263.16

Question 3

a)
The calculations is given in .xls file.
b)

The calculation is in .xls file

If the wage is $75, then there must be 5 employees.
If the wage is $100, then there must be 3 or 4 employees.
If the wage is $125, then there must be 2 employees.
If the wage is $150, then there must be 1 employee.
If the wage is $175, then there must be 1 employee.
c)

Discussion Part

I choose the 5th topic.
At the turn of the third millennium, the growing international financial flows and foreign direct investment, the increase in world trade, the activities of TNCs, strengthening the role of international economic and political organizations make globalization one of the main distinguishing features of the modern world economy. In economics, globalization is often defined as a process of integration that takes global trends.

Positive moments of labor force globalization are:

o cheap imports from Third World countries, which constrains inflation and promotes the growth of incomes and the economy;
o globalization facilitates the flow of capital and cheap labor;
o Growth in US exports helps to create high-paying jobs.

The disadvantages are:

o the transfer many enterprises abroad is reducing demand for American labor force;
o inflow of labor increases competition in the labor market and reduce the wage rate;
o deterioration of working conditions;
o continuing of the violation of the rights of migrants at the rate of wage ($ 5.15 / hour).
There are a number of objective reasons, causes a drop in wages and poorer working conditions. The first is intensifying global competition, which gives rise to the desire for cost reduction. There has also been a weakening of state regulation of private business. The government's desire to strengthen the position of their countries in export markets will inevitably lead to an increase in tax and other incentives to TNCs.
The impact of TNCs is an important aspect in the study of the labor market in the context of globalization. It is well known that TNK widely advantage of global business. As a result of acute international competition TNCs or seek to reduce production costs by reducing wages or to move production to countries where costs are lower. Thus, the leading automakers of America and Europe are to create its domestic enterprises, only 30% of the cost of the final product. However, everything is not so bad. According to the ILO only 3% of the global labor force (70 million people) is employed in manufacturing in multinational companies, with only 30 million to subsidiaries abroad.