![Economics Plus MyLab Economics with Pearson eText (2-semester Access) -- Access Card Package (6th Edition) (The Pearson Series in Economics)](https://www.bartleby.com/isbn_cover_images/9780134417295/9780134417295_largeCoverImage.gif)
Economics Plus MyLab Economics with Pearson eText (2-semester Access) -- Access Card Package (6th Edition) (The Pearson Series in Economics)
6th Edition
ISBN: 9780134417295
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 17, Problem 17.5.5PA
To determine
Whether the piece-rate pay system increases or decreases the productivity of hourly wage labors.
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
I Collado Lumber Company is producing tons of lumber per day. The following table is the costs of production. The managers currently have six machines. The price of output is $5 per unit. The wage of the worker is $55 per worker. From economic theory, we know that the value of the marginal product is price times the marginal product of labor. According to economic theory, a worker should be hired if the value of the marginal product is greater than the marginal cost of hiring a worker.
See the table below.
Number of machines
Number of workers
Output
The marginal product of labor
VMP
Wage
Marginal cost of hiring an additional worker
6
0
0
xxx
xxx
$55.00
xxx
6
1
2
2
$10.00
$55.00
$55.00
6
2
14
12
$60.00
$55.00
$55.00
6
3
30
16
$80.00
$55.00
$55.00
6
4
42
12
$60.00
$55.00
$55.00
6
5
50
8
$40.00
$55.00
$55.00
6
6
56
6
$30.00
$55.00
$55.00
6…
Homework (Ch 18)
Consider a company operating in a competitive market. The company sells units of output and receives a price of $30 per unit, and pays a daily
market wage of $285 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
(Number of workers)
Marginal Product of Labor
(Units of output)
Value of the Marginal Product of Labor
(Dollars)
GE (Dollars per worker)
1
500
A
450
400
350
N
300
250
Q
200
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 value of
the marginal product for the first worker should be plotted with a…
Are the following statements correct or incorrect? Briefly explain:
a. When making the hiring decision, a rational producer should always relay on both the average product of labour and the marginal product of labour.
Chapter 17 Solutions
Economics Plus MyLab Economics with Pearson eText (2-semester Access) -- Access Card Package (6th Edition) (The Pearson Series in Economics)
Ch. 17 - Prob. 17.1.1RQCh. 17 - Prob. 17.1.2RQCh. 17 - Prob. 17.1.3RQCh. 17 - Prob. 17.1.4RQCh. 17 - Prob. 17.1.5PACh. 17 - Prob. 17.1.6PACh. 17 - Prob. 17.1.7PACh. 17 - Prob. 17.1.8PACh. 17 - Prob. 17.1.9PACh. 17 - Prob. 17.2.1RQ
Ch. 17 - Prob. 17.2.2RQCh. 17 - Prob. 17.2.3PACh. 17 - Prob. 17.2.4PACh. 17 - Prob. 17.2.5PACh. 17 - Prob. 17.2.6PACh. 17 - Prob. 17.2.7PACh. 17 - Prob. 17.2.8PACh. 17 - Prob. 17.3.1RQCh. 17 - Prob. 17.3.2RQCh. 17 - Prob. 17.3.3PACh. 17 - Prob. 17.3.4PACh. 17 - Prob. 17.3.5PACh. 17 - Prob. 17.3.6PACh. 17 - Prob. 17.3.7PACh. 17 - Prob. 17.3.8PACh. 17 - Prob. 17.4.1RQCh. 17 - Prob. 17.4.2RQCh. 17 - Prob. 17.4.3RQCh. 17 - Prob. 17.4.4RQCh. 17 - Prob. 17.4.5PACh. 17 - Prob. 17.4.6PACh. 17 - Prob. 17.4.7PACh. 17 - Prob. 17.4.8PACh. 17 - Prob. 17.4.9PACh. 17 - Prob. 17.4.10PACh. 17 - Prob. 17.4.11PACh. 17 - Prob. 17.4.12PACh. 17 - Prob. 17.4.13PACh. 17 - Prob. 17.4.14PACh. 17 - Prob. 17.4.15PACh. 17 - Prob. 17.4.16PACh. 17 - Prob. 17.4.17PACh. 17 - Prob. 17.4.18PACh. 17 - Prob. 17.4.19PACh. 17 - Prob. 17.4.20PACh. 17 - Prob. 17.4.21PACh. 17 - Prob. 17.5.1RQCh. 17 - Prob. 17.5.2RQCh. 17 - Prob. 17.5.3RQCh. 17 - Prob. 17.5.4PACh. 17 - Prob. 17.5.5PACh. 17 - Prob. 17.5.6PACh. 17 - Prob. 17.5.7PACh. 17 - Prob. 17.5.8PACh. 17 - Prob. 17.6.1RQCh. 17 - Prob. 17.6.2RQCh. 17 - Prob. 17.6.3RQCh. 17 - Prob. 17.6.4PACh. 17 - Many people have predicted, using a model like the...Ch. 17 - Prob. 17.6.6PACh. 17 - Prob. 17.6.7PACh. 17 - Prob. 17.6.8PA
Knowledge Booster
Similar questions
- 4. Profit maximization Consider Blewitt's Farm, a small blueberry grower relative to the size of the market whose production has no impact on wages and prices. The following table presents Blewitt's production schedule for blueberries: Labor Output (Number of workers) (Pounds of blueberries) 0 0 1 2 3 4 5 сл 20 38 54 68 80 Suppose that the market wage for blueberry pickers is $200 per worker per day, and the price of blueberries is $13 per pound.arrow_forwardsuppose Fred produces 500 litres of milk every day with 10 workers. the price of milk is $12 per litre, and each worker is paid $550 daily. if th margin product of the last worker employed is 40 litres of milk, explain whether Fred is maximizing his profit. If not, can Fred incrase his profit by employing more or fewer workers? If Fred buys more dairy cattles, how will it affect his demand for labor? Explain with a diagram.arrow_forwardSuppose Die Cast Aluminum Co. is a subcontractor for the auto industry and makes specialized auto parts. There is a bracket it manufactures that it sells for $1.00. The following table shows the number of brackets that can be produced from a given number of labor hours. Assume that the company cannot hire labor for a fraction of an hour. Hours of Labor Output 0 0 1 50 2 90 3 120 4 140 5 150 6 155 7 157 The marginal product of labor for the third hour of labor is ...????. (Enter your response as an integer.) The value of the marginal product of labor for the third hour of labor is ......???. (Round your response to two decimal places.) If the wage paid to workers in Die Cast's plant is $25/hour, it should employ ......??? worker(s). (Enter your response as an integer.) If the wage paid to workers in Die Cast's plant is $35/hour, it should employ ......???? worker(s). (Enter your response as an integer.) If…arrow_forward
- Suppose Die Cast Aluminum Co. is a subcontractor for the auto industry and makes specialized auto parts. There is a bracket it manufactures that it sells for $2.50. The following table shows the number of brackets that can be produced from a given number of labor hours. Assume that the company cannot hire labor for a fraction of an hour. Hours of Labor Output 50 90 1 3 120 4 140 150 155 6 157 The marginal product of labor for the third hour of labor is 30. (Enter your response as an integer.) The value of the marginal product of labor for the third hour of labor is 75. (Round your response to two decimal places.) If the wage paid to workers in Die Casť's plant is $25/hour, it should employ worker(s). (Enter your response as an integer.) If the wage paid to workers in Die Cast's plant is $35/hour, it should employ worker(s). (Enter your response as an integer.) If the wage is $25/hour, but the price of a bracket declines to $2.00, it should employ worker(s). (Enter your response as an…arrow_forwardMartin's Magical Milk Farm produces cow's milk and sells it to a local store for $2.20 per gallon. Agricultural workers in the area are paid a fixed wage rate of $90 per day. Use this information and the information in the table below to answer the questions that follow. What is the marginal product of labour for employing a third worker? What is the value of marginal product of labour for employing a sixth worker? $ Workers 0 1 2 3 4 5 6 Quantity of Milk per day(gallons) 0 70 130 180 220 240 250 Unitsarrow_forwardSuppose Fred produces 500 litres of milk every day with 10 workers. The price of milk is $12 per litre, and each worker is paid $550 daily. If the marginal product of the last worker employed is 40 litres of milk, explain whether Fred is maximizing his profit. If not, can Fred increase his profit by employing more or fewer workers? If Fred buys more dairy cattles, how will it affect his demand for labor? Explain with a diagram.arrow_forward
- Bob White argues that if his wage went up from $10/hour to $20/hour he would still be able to pay rent and feed his family even if he worked half as many hours. So, if his wage increased he would want to work proportionally less. What is strange about Bob White's labor supply curve? it is very elastic it is very inelastic it slopes down it is verticalarrow_forwardSuppose Die Cast Aluminum Co. is a subcontractor for the auto industry and makes specialized auto parts. There is a bracket it manufactures that it sells for $1.50. The following table shows the number of brackets that can be produced from a given number of labor hours. Assume that the company cannot hire labor for a fraction of an hour. Hours of Labor Output 50 90 120 140 150 155 157 4. 6. The marginal product of labor for the third hour of labor is 30. (Enter your response as an integer.) The value of the marginal product of labor for the third hour of labor is 45. (Round your response to two decimal places.) If the wage paid to workers in Die Cast's plant is $25/hour, it should employ 4 worker(s). (Entor your response as an integer.) If the wage paid to workers in Die Cast's plant is $35/hour, it ahould employ 3 worker(s). (Enter your response as an integer.) If the wage is $25/hour, but the price of a bracket declines to $1.00, it should employ worker(s). (Enter your response as an…arrow_forwardThe owner of a Colorado bakery is maximizing profit. K The price of a loaf of bread is $4.00, a bakery worker's wage rate is $8 an hour, and the bakery employs ten workers. What is the marginal product of the tenth bakery worker? If, when the price of a loaf of bread rises to $5.00, the bakery hires twelve workers, what is the marginal product of the twelfth worker? >>> Answer to 2 decimal places. When the price of a loaf of bread is $4.00, the marginal product of the tenth bakery worker isarrow_forward
- Suppose Die Cast Aluminum Co. is a subcontractor for the auto industry and makes specialized auto parts. There is a bracket it manufactures that it sells for $2.00. The following table shows the number of brackets that can be produced from a given number of labor hours. Assume that the company cannot hire labor for a fraction of an hour. Hours of Labor Output 1 50 2 90 3 120 4 140 5 150 155 157 6. The marginal product of labor for the first hour of labor is || (Enter your response as an integer.) The value of the marginal product of labor for the first hour of labor is. (Round your response to two decimal places.) If the wage paid to workers in Die Cast's plant is $25/hour, it should employ worker(s). (Enter your response as an integer.) If the wage paid to workers in Die Casť's plant is $35/hour, it should employ worker(s). (Enter your response as an integer.) If the wage is $25/hour, but the price of a bracket declines to $1.50, it should employ worker(s). (Enter your response as an…arrow_forwardComplete the following table with the profit-maximizing quantity of labor each salon will hire, along with the wage it will pay for each hour of labor. Labor Wage Town 1 Town 2 In Town 1, the salon pays a wage that is wage is the marginal value product of the final unit of labor hired, whereas in Town 2, the the marginal value product of the final unit of labor hired. The outcome in with respect to changes in the wage. is farther from that of a competitive market, given that the supply of labor is elastic (at the market equilibrium)arrow_forwardThe following chart shows the number of workers and hourly wage rate required to produce different quantities of braking systems in an hour. 15 9 13 15 2.89 4.00 4.70 6.43 7.27 Quantity of Output (Q) 2 Workers (L) Wage Rate Per Hour 15.28 15.28 15.28 15.28 15.28 Calculate the cost of producing nine braking systems in an hour. Round your answer to the nearest cent. Provide your answer below:arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, IncPrinciples of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage LearningEconomics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781544336329/9781544336329_smallCoverImage.jpg)
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
![Text book image](https://www.bartleby.com/isbn_cover_images/9781305156050/9781305156050_smallCoverImage.gif)
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337617383/9781337617383_smallCoverImage.gif)
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337617406/9781337617406_smallCoverImage.gif)