EC410A-11.26



EC410A-11.26

Part 1

Model

The graph below shows the typical distribution of higher and lower ability students in schools.

Public education with the support of government is very essential for students. The options (i) which states the leavers of public schools will be the high-ability students are large is correct. The high-ability student who are limited in number as in above graph, might option for better reputation schools and leave bad reputation schools. As for option (ii), it will not reduce the number of students going to school as the low ability students will still go to public schools. The cost of private education is too high and the students who are average performers without voucher will still go to school.

Empirics

The effect of the labor supply due to wages is better evaluated with the help measurement of increase of applications for particular positions for which the wage is high in comparison to other occupations. The number of hours worked for high wage rate and low wage rate will yield only the overtime motivation by the labor. Attraction towards higher wage will be for currently low wage labor and for people who are not in the labor force. The type of job will also have effect on evaluating of labor supply. The number of people who will leave their job, location etc for the high wage occupation is also a good factor to measure for Ronald's research. The barriers to entry will also have to be evaluated for the high wage occupation.

Hence the factors which Mr. Ronald has taken for measuring the effect of labor supply to changes in wages are not enough to observe the phenomena.

Part 2

Paper 1

The Paper's Topic

What attracts more automobile consumers, price reduction or financing incentives? By E. Catesby Beck.

The Paper's Question

How differently customers respond to the changes ...