1. fiogf49gjkf0d fiogf49gjkf0d Describe the principal features of the U.S. earnings distribution and how it has changed over time. |
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2. fiogf49gjkf0d fiogf49gjkf0d Intuitively, what is meant by an increase in earnings inequality? Why might the distribution of earnings provide an inadequate measure of actual inequality? |
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3. fiogf49gjkf0d fiogf49gjkf0d What is meant by the cumulative earnings distribution, F(w)? Can you explain why, F(0) = 0, F(∞) = 1, and F(w) increases in w? |
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4. fiogf49gjkf0d fiogf49gjkf0d What is meant by the Gini coefficient and why does it measure inequality? |
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5. fiogf49gjkf0d fiogf49gjkf0d What are the basic economic principles that underly the superstar phenomenon? |
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6. fiogf49gjkf0d fiogf49gjkf0d In the text, it was remarked (perhaps somewhat mysteriously) that the superstar phenomenon can arise in settings in which the seller provides a service that possesses a discrete pass–fail nature. Explain why the market for lawyers (more precisely, for legal representation) can have this basic flavor and why it might lead to the superstar phenomenon. |
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7. fiogf49gjkf0d fiogf49gjkf0d Suppose that a given employer initially pays everyone the same salary, w. What do you think would happen if it introduced a piece-rate system? |
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