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Math problem and micro economics Question one Labor demand is given by w=32-0.2E Number of workers E= 30 million in Arizona Number of immigrants = 5million Solution a) Market clearing wage if the immigration is not allowed We know that w=32-0.2E therefore W= 32-(0.2×30) = 26 dollars Market clearing wage when borders are open will be; We know that the number of workers migrating is 5 million Therefore w= 32- (0.2 ×5) =31 dollars The immigration surplus will be 31-26= 4 dollars. b) In the case that the workers are skilled the supply of labor in the Arizona area would be elastic in that they would provide competition to the native workers.

The equilibrium wages will rise because of the need to reward the skilled immigrants who will in turn return that through the labor they would provide (Stonecash 125-128). Question two We know the supply of labor is determined by; w=10 +8E Labor demand curve w = 60-2E Labor demand increases to w=80-2E a) To get the wages we simultaneously solve the equations W=10+ 8E…………. .i W= 60-2E…………. .ii W=80-2E……………iii Solving ii and iii we arrive to W= 20 this is achieved after the demand increase.

Thus the demand increases by 20 after the house booming. Therefore from this we can get the labor supply 20= 10+ (8×E) 20-10=8E E= 10/8 = 1.25 b) Demand Supply Equilibrium Question 3 a) Supply of curve of the company is E=20w-120 Marginal cost of labor curve MCE= 6+ 0.1 E Assuming a perfect elastic labor demand for the demand curve; If each hour 10 can are produced 10×$5 = $50 made in one hour 50=6+ 0.1E 44=0.1E E=440 workers 440+120=20W W=$28 This compares to the equilibrium wage in that this can be varied and in most cases it’s reasonable and affordable for the company. b) MC Demand MR Equilibrium Quantity Question 4 Number of residents= 100,000 Average salary= $ 50000 1% of 50000 =$50 The cost of constructing the spotlight will then be 50× 100000= $ 5000000 If the spotlight is not constructed, on the first year the population will be 99998 people but if its constructed the population will be 99999 people The minimal statistical value of a life will be 9999/100000 ×100 = 99.9%\ Question five Arlington town For Bibster Inc.

probability of injury is zero For Heel Toe co. , probability of injury is one Preferences represented by U=2W-8X a) For this firm, probability of injury is zero Therefore U= 2W Which is U= 2×$19 =38 For the heel toe U= 2W -8 Therefore 38= 2w-8 W= $15 b) If the injuries are reduced to 50%, the worker utility will increase but this would depend on the availability of safe equipment and the nature of the operations that the workers are exposed to.

Greater worker utility will also depend on the availability of personal protective equipment used by the worker. On the other hand, less worker utility will result if the worker would steel be exposed to the same working conditions as before, lack of self-protective equipment and also poor supervision by the supervisors Less worker utility due to high risks caused by the same exposure to risks Risks Workers Works Cited Stonecash, Robin E. Principles of Macroeconomics.

South Melbourne, Vic: Cengage Learning, 2011. Print.

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