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- How is the value of marginal product of labor (VMPL) defined? a.Price of output multiplied by the output of the last worker hired b.Price of output multiplied by the price of the last worker hired c.Price of the last worker hired d.Price of outputFollow-up questions. d. Let D be the difference in marginal product between an experienced worker and a new worker (MPe − MPn). Suppose that robust, experienced workers would prefer not to pool with sickly workers at their firm, and so they seek out a new job with an employer who does not offer health insurance. What will be the wage of the robust worker at the new job during the first year there? Keep in mind, these workers will no longer be experienced because they will be adapting to a new firm. Under what conditions will it make financial sense for the robust worker to change jobs? Your answer should be an inequality that includes D, θ, Vr, and Vs. e. D is a measure of job-specific human capital; as workers learn the job, they become more productive so D > 0. However, not every job or industry has the same value for D. In some lines of work D is low, while in others D is high, simply because of the nature of the work. Given the results, you have seen in this problem, in which…(TCO C) You have been hiredto manage a small manufacturing facility whose cost and productiondata are given in the table below.No. of workers Total LaborCost Output TotalRevenue 1 $150 100 $170 2 300 108 550 3 450 114 1150 4 600 119 1470 5 750 123 1600 6 900 125 1700 7 1050 126 1750 Based on your knowledge of marginal analysis, how manyworkers should you hire? Explain youanswer.
- Imagine that the wage-schooling locus is given by w(s)=s^(1/3). What will be the optimal level of education for an individual to take if next period’s earnings in any given time are worth 95% of current earnings for that individual? Answer is s=20/57 I need step by step calculationsl.C<ldbelly Co. sells pencils in a perfectly competitiveproduct market and hires workers in a perfectly competitivelabor matkct. Assume that the market \\'age rate forworkers is $150 per day.a. What rule should Lead belly follow to hire theprofit-maximizing amount of Labor?b. At the profit-maximizing level of output, the marginalproduct of the last worker hired is 30 boxesof pencils per day. Calculate the p rice of a box ofpencils.c. Uraw a diagram of the labor market for pencil workers(as in Figure 4 of this chapter) next to a diagramof the labor supply and demand for Lcadbelly Co. (asin Figure 3). Label the equilibrium wage and quantityof labor for both the market and the firm. H0\\1 arethese diagrams related?d. Suppose some pencil workers switch to jobs in thegrowing computer industry. On the side-by--sidediagrams fmm part (c), show how this changeaffects the equilibrium wage and quantity of Laborfor both the pencil market and lor Leadbelly. Howdocs this change affect the…what factor determine movement along demand curve for labour and increase or decrease in it? why theory of distribution is special case of the theory of pricee?
- provide an isoquant/isocost analysis diagram explaining the possible impact of the higher wages onthe output level, total cost of production and input-factor mix of this business in boththe short and long-run estimated that the wage elasticity of labour demand is -1.7(TCO C) You have been hiredto manage a small manufacturing facility whose cost and productiondata are given in the table below.No. of workers Total LaborCost Output TotalRevenue 1 $150 100 $170 2 300 108 550 3 450 114 1150 4 600 119 1470 5 750 123 1600 6 900 125 1700 7 1050 126 1750 What is the marginal product of the secondworker?refer to the following diagram. Suppose that all other nonwage aspects of the jobs in fhese two markets are identical. We would expect labor supply in B to increase if there are better prospects for advancement in A True of False. Explain
- hy does a measure of labor productivity—the output produced per worker– rise for many firms during recessions? During the boom years period of 2005through November 2007, the annual average output per worker was lower in U.S.manufacturing than during the Great Recession of 2007–2009 as well during therelatively low-demand years since then through 2013.Firms produce less output during recessions as demand for their products falls.Consequently, firms typically lay off workers during recessions. Thus, whetheroutput per worker rises or falls depends on whether output or employment fallsby more. The labor productivity pattern over the business cycle differs across in-dustries. If we know about a firm’s production process, can we predict whetheroutput produced per worker will rise or fall with each additional layoff?1. Supose that·Total Factor Productivity increases·Capital depreciates by 10%Everything else equal, what happens to labor demand in the economy?A. It decreases (i.e. shifts to the left of the demand curve)B. It increases (i.e. shifts to the right of the demand curve)C. Not enough information to answer 2. Does an increase in the wage causes leisure always to increase, because leisure is a normal good?A. YesB. NoC. Only if the substitution effect dominates the income effectD. Only if the income effect dominates the substitution effectDefine the income-leisure trade-off that makes up the labor supply functionand the intuition for the upward sloping labor supply curve. What two effectsare involved in this trade-off? Explain.
