l.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 marginal product of laborat Lcadbelly?
l.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 marginal product of laborat Lcadbelly?
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 4P
Related questions
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| l.C<ldbelly Co. sells pencils in a product market and hires workers in a perfectly competitive labor matkct. Assume that the market \\'age rate for workers is $150 per day. a. What rule should Lead belly follow to hire the profit-maximizing amount of Labor? b. At the profit-maximizing level of output, the marginal product of the last worker hired is 30 boxes of pencils per day. Calculate the p rice of a box of pencils. c. Uraw a diagram of the labor market for pencil workers (as in Figure 4 of this chapter) next to a diagram of the labor supply and in Figure 3). Label the equilibrium wage and quantity of labor for both the market and the firm. H0\\1 are these diagrams related? d. Suppose some pencil workers switch to jobs in the growing computer industry. On the side-by--side diagrams fmm part (c), show how this change affects the equilibrium wage and quantity of Labor for both the pencil market and lor Leadbelly. How docs this change affect the marginal product of labor at Lcadbelly? |
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