Long QuestionsCourse: Econ Labor market (E-341)Book: George Borjas, Labor Economics, 6th edition, 20131. Teaching economics at Purdue is more hazardous than teaching at IU: all those boilermakers making boilers makes for a more dangerous work environment. The universities and the economists are well-informed of the risks. Assume that the universities are profit-maximizers.a. Draw the hedonic wage function for the two universities and the two sets of economists. (6 points)b. What is algebraic sign of the slope of the hedonic wage function and what does it imply about workers and firms? (6 points)2. The state of Florida requires sex therapists to graduate from the Florida Sex Therapy Institute in order to be licensed as a sex therapist and to claim the title of Sex Therapist as an occupation. What are the economic effects on the labor market for sex therapists? Use a well-labeled model in your answer and explicitly show the effect on wage and quantity employed. (8 points)3. Explain the term skill-biased technological change. How does it help us understand changes in U.S. income disparity over recent decades? Use an appropriate graph in your answer. (10 points)
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