MN-1014 Seminar 7 Questions PDF

Seminar 7 -- Questions 1. Small Group Discussion: a. Construction workers are forced to work under COVID-19 lockdown conditions, while many others are allowed to work from home. How is this justified through the measure of GDP and what is GDP failing to account for? b. Are there ot...

Seminar 7 -- Questions 1. Small Group Discussion: a. Construction workers are forced to work under COVID-19 lockdown conditions, while many others are allowed to work from home. How is this justified through the measure of GDP and what is GDP failing to account for? b. Are there other measures of local welfare that could factor in the social value of the life of the construction workers? Provide justifications for your answer. c. What other examples of inequality of specific groups on the labour market are you familiar with? Provide a few other examples of occupational segregation and discuss possible implications due to the consequence of this segregation on the circular flow of the country and the role of the Government in this regard. 2. The table below indicates how many worker days (first column) and machines (second column) are required to produce different levels of output. Suppose that the daily wage for a worker is £60, and machine rental for a day costs £10. Calculate the optimal output and the optimal number of workers and machines if the market price for one unit of output is £400. Workers Output=1 Output=2 Output=3 Output=4 --------- ---------- ---------- ---------- ---------- 1.00 10.00 80.00 270.00 640.00 2.00 5.00 40.00 135.00 320.00 3.00 3.33 26.67 90.00 213.33 4.00 2.50 20.00 67.50 160.00 5.00 2.00 16.00 54.00 128.00 6.00 1.67 13.33 45.00 106.67 7.00 1.43 11.43 38.57 91.43 8.00 1.25 10.00 33.75 80.00 9.00 1.11 8.89 30.00 71.11 10.00 1.00 8.00 27.00 64.00 11.00 58.18 12.00 53.33 13.00 49.23 14.00 45.71 15.00 42.67 3. Discuss the Solow-Swan model along the following lines: a. Draw a diagram that displays consumption and investment per worker as functions of capital per worker. b. Explain how the details of your diagram in (a) are related to the model assumptions. c. Using the diagram, explain how capital per worker and output per worker develop if the savings rate is below the depreciation rate. d. Discuss the impact of a reduction in the savings rate on the long-run level of output per worker.