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6A. Define efficiency wage theory.
6B. Construct a labor
(Please draw the labor market!)
6C. Set out the cost function for a firm.
6D. Set out the profit function for a firm.
6E. Explain how an efficiency wage increases profits
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- Table 14.10 shows levels of employment (Labor), the marginal product at each of those levels, and the price at which the film can sell output in the perfectly competitive market where it operates. What is the value of the marginal product at each level of labor? If the firm operates in a perfectly competitive labor market where the going market wage is 12, what is the films profit maximizing level of employment?Name some factors that can cause- a shift in the supply curve in labor markets.8. In a perfectly competitive labour market, firms are wage takers and the marginal cost of labour equals: A. The average cost of labour B. The marginal product of labour C. The marginal revenue D. The total cost of labour
- 7. Leadbelly Co. sells pencils in a perfectly com petitive product market and hires workers in a perfectly competitive labor market. Assume that the market wage rate for workers is $150 per day a What rule should Leadbelly follow to hire the profit-maximizing amount of labor?A perfect competitor charges a price of $30. The first worker he would hire would have a marginal physical product of 20, the second worker he would hire would have a marginal physical product of 18, the third worker would have a marginal physical product of 16, and the fourth worker would have a marginal physical product of 14. (a) How many workers would he hire if the wage rate were $540? worker(s) hired How much would his wage bill be? $ wage bill (b) How many workers would he hire if the wage rate were $470? worker(s) hired How much would his wage bill come to? $ wage bill.Suppose a firm purchases labor in a competitive labor market and sells its product in a competitive product market. The firm’s elasticity of demand for labor is -0.4. Suppose the wage increases by 5 percent. What will happen to the number of workers hired by the firm? What will happen to the marginal productivity of the last worker hired by the firm?
- The motivation for many people pursuing a college degree is to improve their human capital. Describe how improving human capital increases wages. In your description, be sure to address the marginal product of labor.Explain how rising wages could lead to a backward bending supply of labor curve.Discuss factors that could lead to an increase in the labor supply and the effect that shift would have on wages.2. Which one of the following is not an example of efficiency wages? Group of answer choices a) Firms willingly pay high wages to attract higher-quality job applicants. b) Firms willingly pay high wages to increase worker effort, reducing “shirking”. c) Firms willingly pay high wages to reduce turnover, which is costly to firms. d) Firms willingly pay high wages because of the law of mini wage.Consider the potted plant industry, which has a competitive labor market. A potted plant sells for $10. The Lth worker hired in the industry produces an additional 1000 – L potted plants. The labor supply curve in the potted plant industry is W = 1000 + 10L. Find the equilibrium wage hired in the industry. Find the equilibrium number of workers hired in the industry.
- Q3) True or false explain this a) In a competitive labor market, the price of labor is determined by the industry that hires the labor. b) In a competitive labor market if the wage is $10.00 than the MRC of labor is $10.00. c) labor and capital can never be substituted for each other. Explain it earlyA firm hires labor in a perfectly competitive labor market. Its current profit-maximizing hourly output is 100 units, which the firm sells at a price of $5 per unit. The Marginal Physical product (MPP) of the last unit of labor employed is 5 units per hour. The firm pays each worker an hourly wage of $15. a)What Marginal Revenue (MR) does the firm earn from sale of the output produced by the last worker employed? b)Does this firm sell its output in a perfectly competitive market?
