MICROECONOMICS>LL PRINT COMPANION<
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ISBN: 9781260517651
Author: McConnell
Publisher: MCG
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Chapter 17.A, Problem 2ADQ
To determine
The percentage of wage and salary workers who are union members.
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Suppose the demand curve for union labor is given by the equation: L = 450 − 3W.Suppose the current wage is $20. Now suppose the union is successful in raising the wage of its members to $28. At the same time, it is able to shift the demand for labor out to: L = 510 − 3W.
Has the higher wage negotiated by the union reduced the employment opportunities of its members? If so, by how much?
c. Who has benefitted and who has lost as a result of this negotiation. Be specific and complete.
Suppose the demand curve for union labor is given by the equation: L = 450 − 3W.Suppose the current wage is $20. Now suppose the union is successful in raising the wage of its members to $28. At the same time, it is able to shift the demand for labor out to: L = 510 − 3W.
a. What was the original employment level? What is the new employment level?
b. Has the higher wage negotiated by the union reduced the employment opportunities of its members? If so, by how much?
c. Who has benefitted and who has lost as a result of this negotiation. Be specific and complete.
3) Suppose that the supply curve for the labour to a firm is given by L = 100W and the marginal expense of labour curve is given by MEL = L/50 where W is the (nominal) market wage. Suppose also that the firm’s demand for labour (marginal revenue product) curve is given by L = 1, 000 − 100MRPL.
a) If the firm acts as a monopsonist, how many workers will it hire in order to maximise profits? What wage will it pay? How will this wage compare to the MRPL at this employment level? b) Assume now that the firm must hire its workers in a perfectly competitive labour market. How many workers will the firm hire now? What wage will it pay?
c) What is the deadweight loss from the labour market for a monopsonist? Graph your results and show the DW L
Chapter 17 Solutions
MICROECONOMICS>LL PRINT COMPANION<
Ch. 17.3 - Prob. 1QQCh. 17.3 - Prob. 2QQCh. 17.3 - Prob. 3QQCh. 17.3 - Prob. 4QQCh. 17.A - Prob. 1ADQCh. 17.A - Prob. 2ADQCh. 17.A - Prob. 3ADQCh. 17.A - Prob. 4ADQCh. 17.A - Prob. 1ARQCh. 17.A - Prob. 2ARQ
Ch. 17.A - Prob. 3ARQCh. 17.A - Prob. 4ARQCh. 17.A - Prob. 1APCh. 17.A - Prob. 2APCh. 17 - Prob. 1DQCh. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQCh. 17 - Prob. 6DQCh. 17 - Prob. 7DQCh. 17 - Prob. 8DQCh. 17 - Prob. 9DQCh. 17 - Prob. 10DQCh. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 1PCh. 17 - Prob. 2PCh. 17 - Prob. 3PCh. 17 - Prob. 4PCh. 17 - Prob. 5P
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