Question

10. Based on compensating differentials who would you expect to earn more a lumberjack or a store clerk?

11. How do unions control the supply of Labor?

12. What does it mean that a good is excludable?

Answer 1

10 compensating wage differential that show relationship between wage rate and unpleasantness, risk, associated with particular jobs in hand. a substantial additional amount offered to person to motivate him to work whether work is of their interest or not. based on this concept lumberjack who falls cut down the tree will earn more as risk is higher in his job and he might be get tired due to heavy work load then compensating wage differential motivate him to work hard and will push him to higher amount of wages. than the store clerk whose job might be less risky and routine in nature.

11 union is kind of organization or body that negotiate the wages with employers who might be corporate, businesses or other organization. union follows the collective bargain approach and ask the employer to pay wages which should be higher than the market equilibrium wages this leads to increase in wage but decrease in labor hours on account of employers that might be not accepted by employer at all. employer want to have same kind of labor hours against the higher wages that union also does not accept and union not able to supply adequate labor to employer.

12 When a person who has not paid required amount of money to access that product that product is considered as excludable as it does not all person to consume. in economics excludable goods has not given right to person to consume who has not paid any amount regarding the same.