Principles Of Microeconomics (book With Myeconlab With Pearson Etext Access Card)
12th Edition
ISBN: 9780134435039
Author: CASE, Karl E.; Fair, Ray C.; Oster, Sharon E.
Publisher: PEARSON
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Question
Chapter 10, Problem 4.2P
To determine
Income inequality.
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Use the data in the tables to answer the question that follows.
Market
Price of Output
Quantity Supplied of Output
Quantity Demanded of Output
$5
25,000
60,000
$10
50,000
50,000
$15
75,000
40,000
$20
100,000
30,000
$25
125,000
20,000
Firm
Quantity of Labor
Total Product
0
0
15
105
30
190
45
265
60
325
What is the marginal revenue product of the 45th unit of labor, assuming this market is perfectly competitive in both the factor and output markets?
A-$30. B-$50. C-$63. D-$100. E-$2,650
(2) The marginal benefit to suppliers will be less than the marginal cost to the single buyer. This describes
A-perfect competition. B-monopolistic competition. C-an oligopoly. D-a monopoly
E-a monopsony
Q40
If one worker in southern Ontario worker can pick $30 worth of tomatoes two workers together can pick $70 worth of tomatoes, the
Multiple Choice
data given are insufficient to determine the marginal revenue product of either worker.
data given suggests diminishing returns.
marginal revenue product of the first worker is $40.
marginal revenue product of each worker is $35.
marginal revenue product of the second worker is $40.
Use the table to answer the question that follows.
Quantity of Labor
MP of Labor
Quantity of Capital
MP of Capital
1
30
1
50
2
25
2
40
3
20
3
35
4
15
4
15
5
10
5
5
What combination of labor and capital would satisfy the input hiring rule that minimizes the cost of production, if the price of labor is $5 and the price of capital is $10?
A-1 unit of labor; 3 units of capital. B-2 units of labor; 2 units of capital
C-3 units of labor; 2 units of capital. D-4 units of labor; 4 units of capital
E-5 units of labor; 1 unit of capital
Chapter 10 Solutions
Principles Of Microeconomics (book With Myeconlab With Pearson Etext Access Card)
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Similar questions
- Recently, the Boeing Commercial Airline Group (BCAG) recorded orders for more than 15,000 jetliners and delivered more than 13,000 airplanes. To maintain its output volume, this Boeing division combined efforts of capital and more than 90,000 workers. Suppose the European company Airbus enjoys a similar production technology and produces a similar number of aircraft but that labor costs (including fringe benefits) are higher in Europe than in the United States. Please explain whether workers at Airbus have the same marginal product as workers at Boeing?arrow_forward12. Use the data in the tables to answer the question that follows. Market Price of Output Quantity Supplied of Output Quantity Demanded of Output $5 25,000 60,000 $10 50,000 50,000 $15 75,000 40,000 $20 100,000 30,000 $25 125,000 20,000 Firm Quantity of Labor Total Product 0 0 15 105 30 190 45 265 60 325 What is the marginal revenue product of the 45th unit of labor, assuming this market is perfectly competitive in both the factor and output markets? A-$30 B-$50 C-$63 D-$100 E-$2,650 5.If the demand for product Y increases significantly, then A-the demand for the labor used to make Y decreases B-the quantity of labor supplied to produce Y will decrease C-the supply of labor to produce Y will increase D-only the quantity demanded of labor increases E-the demand for the labor used to make Y increasesarrow_forwardConsider the Labor Economics Question. This will provide insight into the idea of the optimal number of workers and the value of the marginal product of labor. If wages in the restaurant is $16.80 per hour and the price of a Hamburger is $8.30 and the production function for the workers is: Q = 11L – 0.25L2 How many workers should Your Restaurant employ during the lunch hour to maximize profits? 1 Point (note—the value of the marginal product of labor and the marginal revenue product are the same) We maximize profits which are total revenues less total costs:arrow_forward
- The following are correct descriptions about the concept of Marginal Productivity of Labor (MPL), EXCEPT: Question 1 options: MPL measures the extra production generated by adding one extra unit of labor. MPL initially increases and eventually declines as more units of Labor are added. From the producer's perspective, The optimal level of labor is the one when MPL = Market Wage and MPL is still Increasing. If MPL increases for any given amount of labor, it will lead to a shift up of the Demand for Labor.arrow_forwardThe Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship between the number of workers Zippy hires and total output: Labor Input (workers per day) Total Output (boxes of paper per day) 0 0 1 15 2 27 3 36 4 43 5 48 6 51 Assuming the selling price is $10 per box, answer the following questions: What is the marginal revenue product (MRP) of each worker? How many workers will Zippy hire if the wage rate is $100 per day? How many workers will Zippy hire if the wage rate is $75 per day? Assume the wage rate is $75 per day and the price of a box of paper is $20. How many workers will Zippy hire?arrow_forwardWhy does a profit-maximizing firm hire workers up to the point where the wage equals the value of marginal product? Show that this condition is identical to the one that requires a profit-maximizing firm to produce the level of output where the price of the output equals the marginal cost of production.arrow_forward
- The Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship between the number of workers Zippy hires and total output, with all other inputs being held constant. In the following table, for each quantity of labor input, fill in the marginal product (MP) and marginal revenue product (MRP) for Zippy. (Note: When the price doubles, this will also double the marginal revenue product.) Labor Input Total Output Marginal Product Marginal Revenue Product (Workers per day) (Boxes of paper per day) (Boxes of paper per day) Price = $10 Price = $20 (Dollars) (Dollars) 0 0 1 25 2 45 3 60 4 70 5 75 6 77 Assume that the selling price of paper is $10 per box. If the wage rate is $125.00 per day, Zippy will hire ______workers. Continue to assume that the selling…arrow_forwardKelsey owns a cotton candy shop that employs 7 people. The employees are paid $12 per hour, and a cotton candy sells for $3. If Kelsey is maximizing her profit (and operating in a perfectly competitive output and perfectly competitive labor market), what is the value of the marginal product of labor of the last worker she hired? What is this worker’s marginal product of labor?arrow_forwardConsider a company operating in a competitive market. The company sells units of output and receives a price of $20 per unit, and pays a daily market wage of $330 to each worker it employs. In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers. Labor Output Marginal Product of Labor Value of the Marginal Product of Labor (Number of workers) (Units of output) (Units of output) (Dollars) 0 0 20 1 20 19 2 39 18 3 57 15 4 72 12 5 84 On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show the wage rate. (Note: If you cannot place the wage rate at the level you want, move the two end points individually.) Hint: Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the…arrow_forward
- Question 11 Refer to Figure 1 in Question 11. The car-repair shop charges $150 per repair. What is the value of the marginal product of the third mechanic? (Enter your answer without a dollar sign)arrow_forwardPlease answer ALL questions below: 1.The marginal revenue product givesa. the additional revenue obtained when an additional unit of a variable input is hired. b. the additions to total cost when an additional unit of a variable input is hired. c. the amount that other inputs must increase by when labor increase by one unit. d. the change in total product for an additional unit of a variable input. 2. When manufacturing an iPhone, parts must be soldered together. This work can be done by labor or by a robot (capital). More robots will be hired when the price of labor increases. This is known as a. the substitution effect. b. the complementary effect. c. marginal revenue product. d. the effect of changing labor productivity. 3. Which of the following is the largest union in the United States? a. American Federation of State, County, and Municipal Employees b. National Education Association c. International Brotherhood of Electrical Workers d. International Brotherhood of Teamsters 4.…arrow_forward1. Espresso Yourself Coffee Shop hires workers in a competitive labor market to make coffee. The ingredients required to make each cup of coffee cost 50 cents. The coffee shop's hourly output of coffee varies with the number of workers hired, as shown in the table. Each cup of coffee sells for $2.00. Number of workers Coffee (cups/hour) 0 0 1 25 2 45 3 60 4 70 5 75 The marginal product of the third worker is ________ than the marginal product of the second worker, implying that ________. greater; diminishing returns are absent less; diminishing returns are present neither greater nor less; the third worker will be hired less; the third worker will never be hired Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
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