Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 11, Problem 9P
(a)
To determine
Which worker values leisure the most: Joe, Mandy or Jim.
(b)
To determine
Total labor supply at
(c)
To determine
Equilibrium wage when labor is fixed at
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Assume that the supply of electrical technicians is low so a firm hires a group of them at $18 per hour. Two years later, due to a recession, the supply of technicians is high so the market rate for them is now $15 per hour. Should the firm pay new hires $18 or $15? Given that the firm bases pay on supply and demand, should it lower the pay of existing mechanics to $15
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Suppose that the market for labor is initially in equilibrium. An increase in the price of output will cause the equilibrium wage
a. and the equilibrium quantity of labor to fall. b. and the equilibrium quantity of labor to rise. c. to rise and the equilibrium quantity of labor to fall. d. to fall and the equilibrium quantity of labor to rise.
Chapter 11 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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- Draw supply and demand curves for the labor market. What is the equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*)? If the current market wage is $10.50, how does the labor market adjust back to the equilibrium? If a minimum wage of $8.50 an hour is mandated, what is the quantity of labor demanded? what is the quantity of labor supplied? What is the amount of shortage or surplus in the labor market as a result of the price control? If a minimum wage of $9.50 an hour is mandated, what is the quantity of labor demanded? what is the quantity of labor supplied? What is the amount of shortage or surplus in the labor market as a result of the price control? Using the supply and demand graph in part (a) above, illustrate the effect of the price control.arrow_forwardPhil's Copy Studio pays its workers $60 per day and sells poster-size copies for $10 per print. Now suppose during the holiday season the price of poster-size copies increases to $12. What happens? The demand for labor decreases. The demand for labor increases. The quantity demanded of labor decreases, but the demand for labor curve does not shift. The quantity demanded of labor increases, but the demand for labor curve does not shift.arrow_forwardWhich effect is most associated with a shortage of laborarrow_forward
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