Labor (Number of workers) 01 02 0 3 0 1 2 04 3 Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week by various numbers of workers. If the price per bracelet in a perfectly competitive product market is $8, how many workers would the firm employ if the weekly wage rate is $800? 4 5 Output (Bracelets per week) 0 200 360 480 560 600

Labor (Number of workers) 01 02 0 3 0 1 2 04 3 Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week by various numbers of workers. If the price per bracelet in a perfectly competitive product market is $8, how many workers would the firm employ if the weekly wage rate is $800? 4 5 Output (Bracelets per week) 0 200 360 480 560 600

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter14: Labor Markets And Income

Section: Chapter Questions

Problem 1SCQ: Table 14.10 shows levels of employment (Labor), the marginal product at each of those levels, and...

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In a perfectly competitive labor market, a profit maximizing firm will hire labor up to the point at which the:O. wage rate >marginal revenue productO. wage rate= marginal resource costO. wage rate =marginal productO. wage rate = marginal revenue productO. wage rate <marginal revenue product
Wmin Wage w W 9p minimum wage equilibrium wage Quantity q qs S Assume Qd=10, Q*=15, Qs=20, W*=$8, and Wmin-$16. Due to the implementation of the new minimum wage... O a. The number of people unemployed in this market would rise from 0 to 10. O b. The number of people unemployed in this market would rise from 15 to 20. O c. Companies are unable to fill 10 new vacancies. O d. Companies are unable to fill 5 new vacancies.
Table 14.10 shows levels of employment (Labor), the marginal product at each of those levels, and the price at which the firm can sell output in the perfectly competitive market where it operates. a. What is the value of the marginal product at each level of labor?b. If the firm operates in a perfectly competitive labor market where the going market wage is $12, what is thefirm’s profit maximizing level of employment?
Supply of construction workers in a small town is given by Qs = 4W- 20, and demand for construction workers is given by Qd 100-2W, where Q is the number of workers and W is the hourly wage. The town government imposes a tax of $1 per hour per construction worker. What percentage of the tax will construction workers end uppaying?OA. 50%O B. 60%OC. 75 %OD. 33%
Consider a small landscaping company run by Mr. Viemeister. He is considering increasing his firm’s capacity. If he adds one more worker, the firm’s total monthly revenue will increase from $50,000 to $58,000. If he adds one more tractor, monthly revenue will increase from $50,000 to $62,000. Each additional worker costs $4,000 per month, while an additional tractor would also cost $4,000 per month. LO16.5 a. What is the marginal product of labor? The marginal product of capital? b. What is the ratio of the marginal product of labor to the price of labor (MPL/PL)? What is the ratio of the marginal product of capital to the price of capital (MPK/PK)? c. Is the firm using the least-costly combination of inputs? d. Does adding an additional worker or adding an additional tractor yield a larger increase in total revenue for each dollar spent?
4. Suppose that low-skilled workers employed in clearing woodland can each clear one acre per month if each is equippedwith a shovel, a machete, and a chainsaw. Clearing one acrebrings in $1,000 in revenue. Each worker’s equipment coststhe worker’s employer $150 per month to rent and each workertoils 40 hours per week for four weeks each month. LO17.6 a. What is the marginal revenue product of hiring one lowskilled worker to clear woodland for one month?b. How much revenue per hour does each worker bring in?c. If the minimum wage were $6.20, would the revenue perhour in part b exceed the minimum wage? If so, by howmuch per hour?d. Now consider the employer’s total costs. These includethe equipment costs as well as a normal profit of $50 peracre. If the firm pays workers the minimum wage of$6.20 per hour, what will the firm’s economic profit orloss be per acre?e. At what value would the minimum wage have to be set sothat the firm would make zero economic profit fromemploying an…
32. Assuming labor is the only cost for production, a firm hires labor up to the point at which the wage equals (i) the value of the marginal product of labor, (ii) the marginal cost of an additional unit of output, (iii) output price multiplied by the marginal product of labor, for maximum profit. O (i) and (iii) only O (i) and (ii) only (ii) and (iii) only O (i), (ii), and (iii)
3) Suppose that the supply curve for the labour to a firm is given by L = 100W and the marginal expense of labour curve is given by MEL = L/50 where W is the (nominal) market wage. Suppose also that the firm’s demand for labour (marginal revenue product) curve is given by L = 1, 000 − 100MRPL. a) If the firm acts as a monopsonist, how many workers will it hire in order to maximise profits? What wage will it pay? How will this wage compare to the MRPL at this employment level? b) Assume now that the firm must hire its workers in a perfectly competitive labour market. How many workers will the firm hire now? What wage will it pay? c) What is the deadweight loss from the labour market for a monopsonist? Graph your results and show the DW L
Table: Production of Cabinets Quantity of Labor(workers) Quantity ofCabinets Q Marginal Productof Labor(cabinets per hour) 0 0 1 5 5 2 11 6 3 16 5 4 20 4 5 23 3 6 25 2 7 26 1 8 25 -1 Reference: Ref 11-6 Table: Production of Cabinets (Table: Production of Cabinets) Use Table: The Production of Cabinets. If each cabinetmaker could be hired at no cost, how many workers would your firm employ? Select one: a. two b. seven c. six d. eight
3. Suppose that the supply curve for private schoolteachers is Ls = 20,000 + 350W, and the demand curve for such schoolteachers is Ld = 100,000 - 150W, where L = the number of teachers and W = the daily wage. 1 a. Plot the supply and demand curves. b. What are the equilibrium wage and employment levels in this market? c. What will be the effect on labour demand and supply if the government imposes a minimum wage of 200 GHS.
(2) Suppose you find the demand (Qd, as thousands) and supply (Qs, as thousands) for long-haul truck drivers in one market can be specified as functions of the yearly wage paid (W, as thousand $) as following. Demand for drivers: Qd = 155 – 1.5 * W, Supply of drivers: Qs = 36 + 0.25 * W, How much is the market equilibrium level of wage for truck drivers (as thousands) and the how many jobs will be in this market? Now you noticed a company pays 40% higher wage than the market equilibrium level to hire truck drivers, how to explain this case?
Table: Employment and Output Quantity of Labor(workers) Quantity of Wheat(bushels) Marginal Product of Labor(bushels per worker) 0 0 19 1 19 17 2 36 15 3 51 13 4 64 11 5 75 9 6 84 7 7 91 5 8 96 Reference: Ref 19-4 Table: Employment and Output (Table: Employment and Output) Use Table: Employment and Output. In the table, if the price of a bushel of wheat is $10, then the value of the marginal product of the third worker is: Select one: a. $15. b. $510. c. $150. d. $170.