[Related to the Apply the Concept on page 578] A business columnist for the New York Times estimated that the wealth of J.K. Rowling, author of the Harry Potter novels, at $1.2 billion. The columnist observed, “Along with other famous authors, entertainers and sports stars, Ms. Rowling has also benefited from globalization and technology advances.” What technology advances is he likely referring to? Why would those advances increase Rowling’s wealth compared with the wealth of a similarly popular author of, say, the 1960s?

The following table is similar to Table 17.2 on page 580, except that it includes the earnings of Asian males and females. Does the fact that Asian males are the highest-earning group in the table affect the likelihood that economic discrimination is the best explanation for why earnings differ among the groups listed in the table? Briefly explain your argument.

Sam Goldwyn, a movie producer during Hollywood’s Golden Age in the 1930s and 1940s, once remarked about one of his stars: “We’re overpaying him, but he’s worth it.”

If he was overpaying the star, why would the star have still been worth it?

Sam Goldwyn, a movie producer during Hollywood’s Golden Age in the 1930s and 1940s, once remarked about one of his stars: “We’re overpaying him, but he’s worth it.”

In what sense did Goldwyn mean that he was overpaying this star?

Describe how the graph of f varies as c varies. Graph several members of the family to illustrate the trends that you discover. In particular, you should investigate how maximum and minimum points and inflection points move when c changes. You should also identify any transitional values of c at which the basic shape of the curve changes.

$$f(x)=cx+sin x$$

[Related to the Apply the Concept on page 574] During the same period that robots and other new technologies have been affecting the labor market, there has been an increase in imports to the United States of manufactured goods—including shoes, clothing, and automobiles— from countries in which workers receive lower wages. In addition, some U.S. firms have engaged in “offshoring,” in which they move some operations—such as telephone help lines—to other countries where wages are lower.

By looking at changes in equilibrium wages in the affected industries, can we distinguish the effects of increased use of robots, increased foreign imports, and increased offshoring? Briefly explain.

Suppose Ford Motor Company issues a five year bond with a face value of $5,000 that pays an annual coupon payment of$150. a. What is the interest rate Ford is paying on the borrowed funds? b. Suppose the market interest rate rises from 3% to 4% a year after Ford issues the bonds. Will the value of the bond increase or decrease?

During the 1970s, many women changed their minds about whether they would leave the labor force after marrying and having children or whether they would be in the labor force most of their adult lives. In 1968, the National Longitudinal Survey asked a representative sample of women aged 14 to 24 whether they expected to be in the labor force at age 35. Twenty-nine percent of white women and 59 percent of black women responded that they expected to be in the labor force at that age. In fact, when these women were 35 years old, 60 percent of those who were married and 80 percent of those who were unmarried were in the labor force. In other words, many more women ended up being in the labor force than expected to be when they were of high school and college age. What effect did this fact have on the earnings of these women? Briefly explain.

A columnist in the New York Times noted that the U.S. labor supply “in the next decade is expected to expand at less than half the pace of the 1960s, 1970s and 1980s.” What explains these changing growth rates in the U.S. labor supply?

[Related to Solved Problem 17.1 on page 566] Fill in the missing values in the following table for Terrell’s Televisions.

Use the information in the table to draw a graph like Figure 17.1 on page 565 that shows the demand for labor by this firm. Be sure to indicate the profitmaximizing quantity of labor on your graph.

In the Immigration Act of 1990, Congress established the H-1B visa program, intended to allow U.S. firms to hire foreign workers in areas such as the physical sciences, computer programing, and engineering. John Bound and Nicolas Morales of the University of Michigan and Gaurav Khanna of the University of California, San Diego, studied the effects of the H-1B program on the market for computer science (CS) workers in the United States in the years from 1994 to 2001, during which the Internet first became important for the operations of U.S. firms. They found that the visa program may have had effects on labor demand in two ways: (1) if immigrant CS workers were responsible for innovations, such as improving the functioning of Web sites, that required more CS workers to be hired, and (2) if U.S. firms hiring immigrant CS workers reduced the likelihood that the firms would have hired foreign technology firms to carry out CS work. They noted, “If computer scientists are a sufficient spur to innovation, or if domestic employers can readily offshore CS work, any negative effects that an increase in the number of foreign CS workers might have on the domestic high-skill workforce would be offset by increases in the domestic demand for computer scientists.”

The authors estimate that the H-1B visa program resulted in a reduction of about 4 percent in the wages U.S. CS workers would otherwise have received. Does this conclusion allow you to determine whether the program had a greater effect on labor demand or on labor supply? Briefly explain.

[Related to Solved Problem 17.1 on page 566] Fill in the missing values in the following table for Terrell’s Televisions.

From the information in the table, can you determine whether this firm is a price taker or a price maker? Briefly explain.

What effect would the following events be likely to have on the price of Google’s stock?

Google’s board of directors becomes dominated by close friends and relatives of its top management.

The principal-agent problem arises almost everywhere in the business world, and it also crops up even closer to home. Discuss the principal-agent problem that exists in the college classroom. Who is the principal? Who is the agent? What potential conflicts in objectives exist between this principal and this agent?