Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In 2010, many unskilled workers in the United States earned the Federal minimum wage of $7.25 per hour. By contrast, average earnings in 2010 were

In 2010, many unskilled workers in the United States earned the Federal minimum wage of $7.25 per hour. By contrast, average earnings in 2010 were about $20.00 per hour, and certain highly skilled professionals, such as doctors and lawyers, earned $150.00 or more per hour. a. If we assume that wage differences are caused solely by differences in productivity, how many times more productive was the average worker than a worker being paid the Federal minimum wage? Instructions: Round your answer to two decimal places. times more productive than a minimum wage worker How many times more productive was a $150-per-hour lawyer compared to a worker earning minimum wage? Instructions: Round your answer to two decimal places. times more productive than a minimum wage worker b. Assume that there are 20 minimum-wage workers in the economy for each $150-per-hour lawyer. Also assume that both lawyers and minimum-wage workers work the same number of hours per week. If everyone works 40 hours per week, how much does a $150-per-hour lawyer earn a week? $ per week How much does a minimum-wage worker earn a week? $ per week c. Suppose that the government pairs each $150-per-hour lawyer with 20 nearby minimum-wage workers. If the government taxes 25 percent of each lawyer%u2019s income each week and distributes it equally among the 20 minimum wage workers with whom each lawyer is paired, how much will each of those minimum-wage workers receive each week? $ each week If we divide by the number of hours worked each week, how much does each minimum-wage worker%u2019s weekly transfer amount to on an hourly basis? Instructions: Round your answer to two decimal places. $ per hour d. What if instead the government taxed each lawyer 100 percent before dividing the money equally among the 20 minimum-wage workers with whom each lawyer is paired. How much per week will each minimum-wage worker receive? $ per week How much is that on an hourly basis? $ per hour

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Global Marketing

Authors: Johny K Johansson

5th Edition

0073381012, 9780073381015

More Books

Students also viewed these Economics questions