3. CleanIt is a perfectly competitive, profit-maximizing trash collection firm. CleanIt hires workers in a perfectly competitive labor market. (a) Draw side-by-side graphs for the labor market and for CleanIt and show each of the following. (i) The market wage, labeled Wy, and the quantity of workers hired in the market, labeled LM (ii) The marginal factor (resource) cost curve, labeled MFC (iii) The marginal revenue product curve, labeled MRP (iv) The wage paid by the firm, labeled Wf, and the quantity of workers hired by the firm, labeled L- (b) Assume that CleanIt is the only firm in the industry to adopt a new technology. The new technology increases the productivity of CleanIt’'s workers. (i) In the short run, will the wage paid by CleanIt be higher than, lower than, or equal to Wf? Explain. (ii) In the short run, will the number of workers hired by CleanIt increase, decrease, or stay the same? Explain.

3. CleanIt is a perfectly competitive, profit-maximizing trash collection firm. CleanIt hires workers in a perfectly competitive labor market. (a) Draw side-by-side graphs for the labor market and for CleanIt and show each of the following. (i) The market wage, labeled Wy, and the quantity of workers hired in the market, labeled LM (ii) The marginal factor (resource) cost curve, labeled MFC (iii) The marginal revenue product curve, labeled MRP (iv) The wage paid by the firm, labeled Wf, and the quantity of workers hired by the firm, labeled L- (b) Assume that CleanIt is the only firm in the industry to adopt a new technology. The new technology increases the productivity of CleanIt’'s workers. (i) In the short run, will the wage paid by CleanIt be higher than, lower than, or equal to Wf? Explain. (ii) In the short run, will the number of workers hired by CleanIt increase, decrease, or stay the same? Explain.

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 3PA

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