ECN 340 Lecture : Chapter 6

48 views2 pages

harlequinmallard38

23 Jan 2012

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

The production of children chapter 6 y children are a source of consumption y children are an object of investment. Children as an economic good y parents get companionship y someone to talk to y take a walk with y parents enjoy being respected and adored y children bring pleasure y y. In the past, children = old age plan (pension) Cost of children y giving birth (pain) y food y clothing y shelter y education y entertainment y medical expenses y insurance y transportation y emotional drain y time of the parents (most important input to having children) Demand and supply of children y child comes when own will, therefore there are always possible surprises (behavior etc) y cannot send one back! Child production y government subsidies will increase # of children y. Issue of fetus transplant- rich mother can have the poor mother carry the baby- both would gain.

Related Questions

If parents enjoy investing in their children, richer parents invest more in their children because they can afford it (i.e., investment is a normal good). True or False?

plumsnake868

Hello,

Could you please help with the below economics question?

Please provide 5 reasons and examples.

Suppose a school is getting more money from the State for school supplies, including textbooks and computers, as well as an extra budget to use for after-school tutoring. The parents of children at the school hear the news and are planning their budget this year for how much to spend on their children's education, as well as the amount of effort to put in helping their children learn.

Using the language of substitutes and complements, describe how you think the improvements in school finances and expenditure on supplies and after-school tutoring will affect the parent's allocation of time and money for their children's education. Consider also how parents' preferences, parent's utility functions, and household time and budget constraints affect choices regarding how parents might choose to invest in their children's education.

skyporpoise575

In 1981 Andrew Carnegie asserted that "parents who leave their children enormous wealth generally deaden their children's talents and energies and tempt them to lead less productive lives."

A.) Evaluate this statement using the labor-leisure model and explain the effects of such inheritances on hours of work and leisure.

B.) Some parents may link the inheritances to the actual amount earned by their children in the labor market. That is, the children can claim the inheritance only if their labor earnings exceed $50,000 per year. However, if their labor compensation is more than $150,000 per year the inheritance will be given to charity. Draw the budget constraint under the earnings-conditioned inheritance (scenario II).

C.) Now assume that the parents are interested in the amount of time their children spend in the labor market. Under this scenario, the children will receive double the market wage rate if they work at least 25 hours per week, three times the market wage if they work between 30 hours and up to 45 hours per week, and only the market wage for any additional hour worked. Draw the budget constraint under the hours-of-work condictioned inheritance (scenario III).

D.) Compare the welfare of the children when there is no inheritance whatsoever (scenario I) and under the two alternative scenarios (scenario II, scenario III). Are the children better off? Are any worse off? Explain.

[Note: For all the previous parts (a)-(d) assume that there is both a labor and a non-labor income component.]

apricotspider478

ECN 340 Lecture : Chapter 6

Document Summary

Get access

Related Documents

ECN 340 Chapter 6: ECN340– Chapter 6.docx

ECN 340 Chapter Notes - Chapter 5: Ceteris Paribus, Dan Scott, Negative Cost

SOC345H5 Lecture Notes - Lecture 8: Blackboard, Economic Capital, Symbolic Capital

Related Questions