4. The graph below shows the efficient contracts and the contract curve. a. Explain the relationship between firm's profit and level of wages. Dollars b. Explain the relationship between utility and firm's profit. c. If the union decides to increase in wage up to point Z, describe the relationship between firm's profit and level of utility at point Z. Uz Us UM Employment Ez
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- Table 14.11 shows levels of employment (Labor), the marginal product at each of those levels, and a monopolys marginal revenue. What is the monopolys marginal revenue product at each level of employment? If the monopoly operates in a perfectly competitive labor market where the going market wage is 20, what is the films profit maximizing level of employment?Table 14.12 shows the quantity demanded and supplied in the labor market for driving city buses in the town of Unionville, where all the bus drivers belong to a union. What would the equilibrium wage and quantity be in this market if no union existed? Assume that the union has enough negotiating power to raise the wage to 4 per hour higher than it would otherwise be. Is there now excess demand or excess supply of labor?Name some factors that can cause a shift in the demand curve in labor markets.
- Explain i11each of the following situations how market forces might give a business an incentive to act in a less discriminatory fashion. A local flower delivery business run by a bigoted white owner notices that many of its local customers are black. An assembly line has traditionally only hired men, but it is having a hard time hiring sufficiently qualified workers. A biased owner of a firm that provides home health care services would like to pay lower wages to Hispanic workers than to other employees.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?Explain the logic behind the race to the bottom argument and the likely reason it has not occurred.
- Other than the demand for labor, what would be another example of a 'derived demand?KINDLY ANSWER quetion "d" 5) (KEY QUESTION) Minimum Wages and Unionsa. Assume an industry without legal minimum wages and unions. Show in a diagram how the equilibriumwage W* is determined, and briefly explain all the concepts in the diagram.b. Now suppose a minimum wage, WMIN, is legislated at a level lower than W*, i.e. WMIN<W*. Show it in thediagram and explain whether the labour market outcomes in part a. change, and how.c. Now suppose a minimum wage is legislated at a level higher than W*, i.e. WMIN>W*. Show it in thediagram and explain what the labour market outcomes will be.d. Now suppose a workers’ union is created and successfully negotiates wage WUNION, which is above bothW* and WMIN, i.e. WUNION>WMIN>W*. Explain what the labour market outcomes will be compared to theprevious partAndrea Mowry is a knitwear designer, and she has a firm DreaReneeKnits. She uses knittersas labour and only uses one variable cost – yarn – and one fixed cost – the price of knittingneedles. She pays R100 for a knitter, R50 for yarn and R100 for knitting needles. Use thisinformation to complete the table values askes and questions below. LABOUR TP MP AP TFC TVC TC ATC MC 0 0 - - 100 0 100 - - 1 2 2 2 100 150 250 125 150 2 5 (a) 2.5 100 300 (d) (e) 66.67 3 9 4 3 100 450 550 61.11 (f) 4 12 3 (b) 100 (c) 700 58.33 50 5 15 2 2.8 100 750 850 60.71 75 a. Complete values a-f.b. Using to the law of diminishing returns, place the concepts in order in which theyreach their turning points: average product, total product, marginal product. c. In the example above, at what value does average total cost and marginal cost reachtheir turning point? d. Beyond the turning point in average variable cost, marginal cost lies _______average variable cost.
- Andrea Mowry is a knitwear designer, and she has a firm DreaReneeKnits. She uses knittersas labour and only uses one variable cost – yarn – and one fixed cost – the price of knittingneedles. She pays R100 for a knitter, R50 for yarn and R100 for knitting needles. Use thisinformation to complete the table values askes and questions below. LABOUR TP MP AP TFC TVC TC ATC MC 0 0 - - 100 0 100 - - 1 2 2 2 100 150 250 125 150 2 5 (a) 2.5 100 300 (d) (e) 66.67 3 9 4 3 100 450 550 61.11 (f) 4 12 3 (b) 100 (c) 700 58.33 50 5 15 2 2.8 100 750 850 60.71 75 a. Complete values a-f.Question 4Andrea Mowry is a knitwear designer, and she has a firm DreaReneeKnits. She uses knittersas labour and only uses one variable cost – yarn – and one fixed cost – the price of knittingneedles. She pays R100 for a knitter, R50 for yarn and R100 for knitting needles. Use thisinformation to complete the table values askes and questions below.Labour TP MP AP TFC TVC TC ATC MC0 0 - - 100 0 100 - -1 2 2 2 100 150 250 125 1502 5 (a) 2.5 100 300 (d) (e) 66.673 9 4 3 100 450 550 61.11 (f)4 12 3 (b) 100 (c) 700 58.33 505 14 2 2.8 100 750 850 60.71 75 a. Complete values a-f.b. Using to the law of diminishing returns, place the concepts in order in which theyreach their turning points: average product, total product, marginal product. c. In the example above, at what value does average total cost and marginal cost…E2 Problem 1: Labor Unions. The aggregate supply of cricket players is given byw = 75 + 2Land the aggregate demand for cricket players is given byw = 315 −4L 1. First assume that the players and the teams are all in perfect competition.a) Find the equilibrium number of players. Find the equilibrium wage.b) Find the league surplus and player surplus. 2. Next assume that the players form a union, but the teams are in perfect competition.a) Find the equilibrium number of players. Find the equilibrium wage.b) Find the league surplus and player surplus. 3. Now assume that the teams also form a league, creating a bilateral monopoly. Theplayers have a well-established union, and thus have slightly more power in negotiation.In particular, the union’s bargaining power is β = 3 5.a) Find the equilibrium number of players.b) What is the wage that gives players all the surplus?c) What is the wage that gives league all the surplus?d) Find the negotiated equilibrium wage.e) Find the league surplus…
