160 Мarginal Factor Cost Ayddng 88 76 64 52 34 Marginal Revenue Product 16 30 60 80 100 120 140 160 210 240 Quantity 200 of Loggers (a) If the wage rate is $34, state whether there will be a shortage or a surplus of loggers and calculate its size. Show your work. (b) Identify the profit-maximizing number of loggers that Larry's Logging will hire. Explain using the labeling on the graph. (c) Identify the profit-maximizing wage rate that Larry's Logging will pay its loggers, Explain using the labeling on the graph. (d) Assume that the market for loggers becomes perfectly competitive. What wage rate would Larry's Logging pay its loggers if it were a perfectly competitive firm? Explain using the labeling on the graph. (e) Assume instead that Larry's Logging uses both labor and capital in its production of logs. The marginal product of the last unit of labor hired is 150 logs per hour and the marginal product of the last unit of capital rented is 200 logs per hour; the hourly wage rate for labor is $30 and the hourly rental price for capital is $50. To minimize the cost of producing its current level of output, should Larry's Logging hire more loggers, fewer loggers, or the same number of loggers? Explain using marginal analysis. Wage Rate (S)
160 Мarginal Factor Cost Ayddng 88 76 64 52 34 Marginal Revenue Product 16 30 60 80 100 120 140 160 210 240 Quantity 200 of Loggers (a) If the wage rate is $34, state whether there will be a shortage or a surplus of loggers and calculate its size. Show your work. (b) Identify the profit-maximizing number of loggers that Larry's Logging will hire. Explain using the labeling on the graph. (c) Identify the profit-maximizing wage rate that Larry's Logging will pay its loggers, Explain using the labeling on the graph. (d) Assume that the market for loggers becomes perfectly competitive. What wage rate would Larry's Logging pay its loggers if it were a perfectly competitive firm? Explain using the labeling on the graph. (e) Assume instead that Larry's Logging uses both labor and capital in its production of logs. The marginal product of the last unit of labor hired is 150 logs per hour and the marginal product of the last unit of capital rented is 200 logs per hour; the hourly wage rate for labor is $30 and the hourly rental price for capital is $50. To minimize the cost of producing its current level of output, should Larry's Logging hire more loggers, fewer loggers, or the same number of loggers? Explain using marginal analysis. Wage Rate (S)
Chapter12: Labor Markets And Labor Unions
Section: Chapter Questions
Problem 1.1P
Related questions
Question
PLEASE ONLY ANSWER PARTS A, D, AND E
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning