Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506893
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 12, Problem 4CQ
To determine
Explain whether productivity gains the major source of higher wages.
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Why 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.
Explain four ways in which a firm might increase its profits by raising the wages it pays sentence.
Explain four ways in which a firm might increase its profits by raising the wages it pays.
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Microeconomics: Private and Public Choice (MindTap Course List)
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- Explain ways in which a firm might increase its profits by raising the wages it pays.arrow_forwardFor each of the following determine the impact on the demand or the supply of labor and the effect on the equilibrium wage and quantity of labor employed. a. An increase in the price of capital. b. A union is formed which uses collective bargaining to obtain higher wages for its members. c. The marginal productivity of workers rises. d. People desire leisure more than ever before (e.g. it is Christmas Day). e. The wages offered in other labor markets requiring similar skills are now offering substantially higher wages. f. The fringe (non-monetary) benefits offered in this market have increased substantially. g. The government has just adopted an "open-door' immigration policy?arrow_forwardUse the following table, which shows a firm's production, output price, and various quantities of labor (workers) employed, to answer the next question. Workers Total Output per Day Price of Good 2 10 $10 3 15 10 4 19 10 5 22 10 6 24 10 7 25 10 How many workers will the profit-maximizing firm hire if the wage rate is $20 per day? Multiple Choice four three six fivearrow_forward
- For each of the following determine the impact on the demand or the supply of labor and effect on the equilibrium wage and quantity of labor employed. 1. The marginal productivity of workers rises.2. The government has just adopted an open-door immigration policy3. People desire leisure more than ever beforearrow_forwardBy Labor Economics theory, what are the short-run and long-run effects of immigration on the wages of native workers? Use diagrams to illustrate your arguments. Describe the evidence of these effects presented in the chapter.arrow_forward
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