Consider a firm withd> 0, under all the assumptions we made in class. If W_F (1 + d) > W_M, then the firm will hire: ●Only men ●Only women ●More women than men ●More men than women ●Equal numbers of men and women
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Consider a firm withd> 0, under all the assumptions we made in class. If W_F (1 + d) > W_M, then the firm will hire:
●Only men
●Only women
●More women than men
●More men than women
●Equal numbers of men and women
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- In a purely competitive labor market (a), market labor supply S and market labor demand D determine the equilibrium wage rate Wc and the equilibrium number of workers Qc . Each individual competitive firm (b) takes this competitive wage Wc as given. Thus, the individual firm’s labor supply curve s = MRC is perfectly elastic at the going wage Wc . Its labor demand curve, d, is its MRP curve (here labeled mrp). The firm maximizes its profit by hiring workers up to where MRP = MRC. Area 0abc represents both the firm’s total revenue and its total cost. The green area is its total wage cost; the blue area is its nonlabor costs, including a normal profit—that is, the firm’s payments to the suppliers of land, capital, and entrepreneurship. This firm’s labor demand curve d in graph (b) slopes downward because: a. the law of diminishing marginal utility applies. b. the law of diminishing returns applies. c. the firm must lower its price to sell additional units of its product. d. the firm is a…In a purely competitive labor market (a), market labor supply S and market labor demand D determine the equilibrium wage rate Wc and the equilibrium number of workers Qc . Each individual competitive firm (b) takes this competitive wage Wc as given. Thus, the individual firm’s labor supply curve s = MRC is perfectly elastic at the going wage Wc . Its labor demand curve, d, is its MRP curve (here labeled mrp). The firm maximizes its profit by hiring workers up to where MRP = MRC. Area 0abc represents both the firm’s total revenue and its total cost. The green area is its total wage cost; the blue area is its nonlabor costs, including a normal profit—that is, the firm’s payments to the suppliers of land, capital, and entrepreneurship. The supply-of-labor curve S slopes upward in graph (a) because: a. the law of diminishing marginal utility applies. b. the law of diminishing returns applies. c. workers can afford to “buy” more leisure when the wage rate increases. d. higher wages are…In a purely competitive labor market (a), market labor supply S and market labor demand D determine the equilibrium wage rate Wc and the equilibrium number of workers Qc . Each individual competitive firm (b) takes this competitive wage Wc as given. Thus, the individual firm’s labor supply curve s = MRC is perfectly elastic at the going wage Wc . Its labor demand curve, d, is its MRP curve (here labeled mrp). The firm maximizes its profit by hiring workers up to where MRP = MRC. Area 0abc represents both the firm’s total revenue and its total cost. The green area is its total wage cost; the blue area is its nonlabor costs, including a normal profit—that is, the firm’s payments to the suppliers of land, capital, and entrepreneurship. A rightward shift of the labor supply curve in graph (a) would shift curve: a. d = mrp leftward in graph (b). b. d = mrp rightward in graph (b). c. s = MRC upward in graph (b). d. s = MRC downward in graph (b).
- (A) T/F/U: A perfectly competitive firm's short-run demand for labor curve will always be steeper than its long-run demand for labor. ((B) T/F/U: The market demand for capital will always be the horizontal summation of each firm's individual demand curves. (C) T/F/U: The majority of economists have backwards-bending labor supply curves.Therefore, the market supply of economists' labor will also be backwards-bending.In the competitive labor market model of this chapter, the "value of the marginal product minus the wage" (MPL xP - W) for a given unit of labor (e.g., worker) gives Group of answer choices a) the change in output from the unit of labor being considered. b) the change in profit from the unit of labor being considered. c) the change in revenue from the unit of labor being considered. d) the change in price from the unit of labor being considered. e) the change in cost from the unit of labor being considered.A small consulting firm is only interested in hiring graduates (denoted by S), but it does not know how many it should hire in order to be profit maximizing. Assume there is a competitive wage of $20 per hour and the production function is F(S)= 100S – (1/8)S2 . Hiring additional workers will increase production F(S) over relevant ranges of S. But is the 51st S more valuable than the 50th S in terms of her additions to overall production? What quantity of graduates should this firm hire and why does it stop hiring at this level of S? How does your answer change if the production function is F(S)= 200S –(1/8)S2 and the wage increases to $22?
- In a perfectly competitive labor market, theoptimal hiring rule is to employ labor up to thepoint wherea. wage ¼ MFC.b. wage ¼ MP.c. wage ¼ MR.d. wage ¼ MRP.Let’s say we extend the the standard 1 person static labor supply problem instead to a family with two people making money. In the family of two money makers, given as person 1 and person 2, the given utility function is u(c1 + c2, l1, l2). Utility is defined as a function of the sum of goods consumed by the two people in the family, and of each person’s leisure time. Each person has a time endowment of “Ti” and gets a wage “wi”, where i = 1, 2. The two person family has a non-labour income defined y (which means this is the income of the family whether or not they work) and face price “p” for consumption goods. How can I utilize the Slutsky equation to show how the labour supply of 2 changes with w1? Thank you!Assume that the marginal cost of hiring additional labor (MCL), the market supply of labor (SL), and the market demand for labor (DL) are determined by the following equations, where w refers to wage and L refers to labor: MCL: w=2+7L SL: w=2+5L DL: w=42−3L Determine how many workers stay unemployed under a monopsony as compared with a perfectly competitive market, assuming firms want to maximize profits in both situations. Write the exact
- Imagine a type of discrimination where firms act as if they pay wf+df when they hire a female worker and wm when they hire a male worker. Where df is a discrimination coefficient. A) If female and male workers were the only inputs, what is the profit function for the firm? What is the firms profit maximizing demand for each type of labour? B) If the marginal product of male and female workers is the same, and if df = .1, what is the ratio of male to female wages? What does it mean to have a discrimination coefficient of .1? Carefully explain what it means.Suppose that the production function is Yt = AtKt^(1/2) Lt^(1/2) where Yt is output, Kt is the stock of capital and Lt is amount of labor firms hire. Assume that Kt = 100, At = 2. (a) Firms in this economy maximize their profits, given by revenue net of labor costs: Yt −WtLt . Derive the firm’s labor demand curve. (b) Workers in this economy maximize their utility, given by U(Ct , Nt) = log(Ct) − Nt , where Ct is consumption and Nt is the amount of labor workers supply. Their budget constraint is Ct = WtNt . Derive the workers’ labor supply curve. (c) Calculate the equilibrium wage rate and employment in this economy using the expressions for labor demand and supply you derived above. Also calculate the total amount of output the economy produces. (d) Suppose that capital doubles, to Kt = 200. Calculate what happens to the wage rate, employment and output. Illustrate the effects of this increase in capital graphically, using a labor demand/supply diagram.Suppose black and white workers are complements in that the marginal product of whites increases when more blacks are hired. Suppose also that white workers do not like working alongside black workers. Will discrimination by white employees lead to the firm choosing to completely segregate its workplace? Does it create a wage differential between black and white workers?
