Posted: February 11th, 2022


1. Explain how markets determine wages and where this can lead in terms of income outcomes for labor market participants.

a. What are 5 plausible reasons that lead to a degree of income inequality?
b. Who does discrimination occur against in the U.S. labor market?

3. What advantage do employers have over workers during bargaining?

4. What do you think is a good that the U.S. has a comparative advantage in producing, and why?

5. What do you think is a good that the U.S. has an absolute advantage in producing, and why is it absolute as opposed to comparative?

6. A number of workers in the United States economy earn exceptionally high pay. For each of the following types of workers, do you believe the high pay is economically justified? Say yes or no, and then explain why or why not.
CEOs of major corporations
Superstar NFL players
Pop music stars
Real estate moguls
Founders of tech companies
Hedge fund managers
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7. Think about a proposed government-provided healthcare system covering everyone in the United States (e.g. “Medicare for All”). Briefly compare and contrast the proposed system with the current system of mixed private and government subsidized healthcare in the United States. Be sure to do your comparing and contrasting in terms of, and in relation to, course concepts we have covered:

positive externalities;
living wage;
supply, demand, and equilibrium;
price ceilings; and
any other relevant course concept you can think of.

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