union's indifference curves have negative slope, but this text folows the convention of naming MRS as the absolute value of the slope) Suppose the product price is $9, the marginal revenue product of labour is given by MRP, = 90-4L, and the wage employment contract will be determined as in the monopoly union model. au asoddns A Using the usual economics axes, graph the demand for labour. The slope of this curve is equal to The absolute value of the slope of the demand curve is B. Write the two equations which a monopoly union's optimal choice must satisty and then solve for the union's ideal outcome The unions ideal is to choose wage equal to w,s At this wage the firm will hire units of labour. C. The slope of the union's indifference curve is equal to at the union's optimal choice. At this point, the union's marginal rate of substitution between employment and wage is equal to At this point the slope of the demand curve is
union's indifference curves have negative slope, but this text folows the convention of naming MRS as the absolute value of the slope) Suppose the product price is $9, the marginal revenue product of labour is given by MRP, = 90-4L, and the wage employment contract will be determined as in the monopoly union model. au asoddns A Using the usual economics axes, graph the demand for labour. The slope of this curve is equal to The absolute value of the slope of the demand curve is B. Write the two equations which a monopoly union's optimal choice must satisty and then solve for the union's ideal outcome The unions ideal is to choose wage equal to w,s At this wage the firm will hire units of labour. C. The slope of the union's indifference curve is equal to at the union's optimal choice. At this point, the union's marginal rate of substitution between employment and wage is equal to At this point the slope of the demand curve is
Chapter10: Labor Markets And Income Distribution
Section: Chapter Questions
Problem 6SQP
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Transcribed Image Text:Suppose the union's objective is to maximize the wage bill and its marginal rate of substitution between employment and wage is given by MRSL,w- w/L (Note
union's indifference curves have negative slope, but this text follows the convention of naming MRS as the absolute value of the slope.) Suppose the product price is
$9, the marginal revenue product of labour is given by MRP, = 90-4L, and the wage-employment contract will be determined as in the monopoly union model.
The absolute value of the slope of
A Using the usual economics axes, graph the demand for labour. The slope of this curve is equal to
the demand curve is
8. Write the two equations which a monopoly union's optimal choice must satisty and then solve for the union's ideal outcome. The union's ideal is to choose wage
equal to w,s
At this wage the firm will hire
units of labour.
C. The slope of the union's indifference curve is equal to
at the union's optimal choice. At this point, the union's marginal rate of
substitution between employment and wage is equal to
At this point the slope of the demand curve is
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