ALBA Corporation supplies lawn mowers for household needs. Producing this tool requires only five machines, which costs $500/machine. These workers will be recruited as needed in the labor market for $18,000 per person. With the simplicity of the manufacturing process, the lawn mower market is highly competitive. Therefore, the market price for one lawn mower is $80. Based on the production data in the following table: a. How many workers are needed if the company's goal is to maximize labor productivity? b. How much labor is needed if the company's goal is to maximize the number of lawn mower produced? c. How many workers should ALBA hire to maximize its profits? Sheet Metal Forming Machine Number of Panels Worker generated 1 600 2 2.000 3 3.000 4 3.600 5 3.600

ALBA Corporation supplies lawn mowers for household needs. Producing this tool requires only five machines, which costs $500/machine. These workers will be recruited as needed in the labor market for $18,000 per person. With the simplicity of the manufacturing process, the lawn mower market is highly competitive. Therefore, the market price for one lawn mower is $80. Based on the production data in the following table: a. How many workers are needed if the company's goal is to maximize labor productivity? b. How much labor is needed if the company's goal is to maximize the number of lawn mower produced? c. How many workers should ALBA hire to maximize its profits? Sheet Metal Forming Machine Number of Panels Worker generated 1 600 2 2.000 3 3.000 4 3.600 5 3.600

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter16: Labor Markets

Section: Chapter Questions

Problem 16.6P

See similar textbooks

Similar questions

Billy is renting trucks that will be used to install solar panels. The table below presents the marginal product (in terms of solar panels installed per week) of various trucks. Assume this is a perfectly competitive market. a. What is the marginal revenue product of each truck if the current market price to install one solar panel is $50? What if the current market price is $100? $150? Using the table below, fill in the “Marginal Revenue Product” columns for each price. Labor Productivity and Marginal Revenue Product for Solar Panel Installers Capital (trucks) Marginal Product (solar panels) Marginal Revenue Product for P = $50 (dollars) Marginal Revenue Product for P = $100 (dollars) Marginal Revenue Product for P = $150 (dollars) 1 24 2 21 3 18 4 15 5 12 6 9 b. Suppose the cost to rent a truck is $900. How many trucks will be rented in the price of a solar panel is $50? trucks How many trucks will be…
Consider a manufacturing firm in a labor market that isperfectly competitive. There are two kinds of workers: productiveworkers whose marginal revenue product is $48,000 per year, andlazy workers whose marginal revenue product is $40,000 per year. Itis difficult for the firm to differentiate between productive andlazy workers. A local college offers a new yearlong astronomy course. Althoughthe cost of tuition is the same for both types of workers, thepsychic cost of having to work hard and get a passing grade islower for productive workers because they are able to learn morequickly than lazy workers. Therefore, the cost of taking the class(including the cost of tuition as well as the psychic cost) is$5,000 per year for a productive worker and $10,000 per year for alazy worker. Because astronomy has little relevance tomanufacturing, taking the class does not increase or decrease aworker's productivity. The firm uses the class as a way to differentiate betweenproductive and lazy…
(b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above. I would like questions i,ii,iii answered please.
(b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases abov
Consider a firm that is perfectly competitive in the market for inputs and outputs. Thefirm hires two types of workers: low-skill (high school graduates and high school dropouts) andhigh-skill (undergraduate and postgraduate degree) workers. The firm compensates high-skilledworkers at the rate wH and low-skill workers at the rate wL. It produces the output subject to aCobb-Douglas production technologyF(L,H) = (AH)α(L)β,where H - is the amount of high-skill hours, L - the amount of low-skill hours, and A - thetechnology parameter that augments the productivity of the high-skill labour. 4. In the short run, the firm cannot increase the amount of high-skill labour . Derive the1short-run demand for low-skill labour.5. What is the substitution effect of the wage increase in the short-run?6. Derive the long-run cost-minimizing demands for high- and low-skilled labour. Show thesolution to the cost-minimization problem on the graph
The table below shows data for the production of Avocados for an individual firm operating in an imperfectly competitive market. Number of workers Number of Avocados Marginal Revenue 0 0 22 10 150 21 20 270 20 30 360 19 40 420 18 50 450 17 Given this data, complete the table: Quantity of Avocados Marginal Product of Labor (MPL) Marginal Revenue Product of Labor (MRPL) 0 - - 10 20 30 40 50
A textile firm in a competitive industry employs a particularly efficient manager torun the operations at its production facility. In the textile industry, a plant managertypically makes a salary of $4,500 per month. The textile firm employing thesuperior manager faces the LAC and LMC curves shown in the figure below. Inlong-run competitive equilibrium, the price of the product is $9 A- typical textile firm in this competitive industry has a minimum long-runaverage cost of $______. The typical textile firm earns economic profit of$______ B-The textile firm with the superior plant manager could earn economic profitof $___________ per month, if no rent is paid to the superior manager C-The superior plant manager is likely to earn a salary of $______ per month,$____________ of which is economic rent
1. The law of diminishing returns indicates that:a. as extra units of a variable resource are added to a fixed resource the marginalproduct will decline beyond some point.b. because of economies and diseconomies of scale a competitive firm's long-runaverage cost curve will be U-shaped.c. the demand for goods produced by purely competitive industries is downsloping.d. beyond some poi 4. Which situation below describes the increasing returns stage of the productionfunction?a. Hiring one more tailor results in three more suits produced per hour.b. Hiring one more baker results in the same output because there is now less thanone oven available per baker.c. Buying one more office computer causes there to be more computers thanworkers.d. Extending the workday results in more tired and less productive worke
Consider a profit-maximizing firm in a perfectly competitive market with several sellers and several buyers (i.e., the firm is a "price taker" of the hourly wages it pays its workers). If a technological innovation made by someone in this firm were to significantly raise the firm's marginal physical product (but not that of any other firm's), then this innovation would: (A) reduce the firm's employment level, because fewer workers are now needed (B) raise the workers' hourly wage as they now contribute more marginal revenue (C) lead the firm to hire more workers but not to raise their wages (D) lead the firm to hire more workers and to pay them higher wages (E) None of the above Only typed answer and don't use chat gpt
A company manufactures three product. The productis sold in three communities, X, Y and Z. The supply function schedules of the three communities as well as that of the entire market supply for okyerefo soap are shown below Unit Price Community X Community Y Community Z Market Supply 100 250 520 725 640 850 700 1000 Usethe information in the table to estimate i. i. the supply equations of each of the three communities. ii. market supply function. ii. market supply when the price decreases to 50.
(a) Why does the labour demand curve slope downwards? (b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above. Question 4 Using your knowledge and understanding of supply and demand analysis to graph the following and explain your graph: (a) an increase in labour productivity. (b) an increase in preference for work. (c) the trade union withdraws labour through a strike.
(a) Why does the labour demand curve slope downwards? (b) A garment factory’s production function is provided in the table. The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above.