Microeconomics (13th Edition)
Microeconomics (13th Edition)
13th Edition
ISBN: 9780134744476
Author: Michael Parkin
Publisher: PEARSON
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Chapter 18, Problem 13APA
To determine

The number of labors hired to maximize profit.

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Q4. The graph below represents Lisena’s Landscaping Service’s demand for labor in the town of Forest Hills. The price of cutting a standard-sized residential lawn is $50 and the market wage rate for a worker is $200 per day. Answer the questions below.      a. At the current market wage rate how many workers will the firm hire?b. Which economics principle can be used to explain why Lisena should NOT hire a fifth worker?c. What is the minimum number of lawns each worker should cut per day given wage rate of $200? Explain with a calculation.d. What happens to the demand for labor curve if the market price of cutting a lawn increases to $65? Explain your answer.e. What happens to the demand for labor curve if the market wage rate increases from $200 per day to $250 per day? Explain your answer.
Acme Inc. supplies rocket ships to the retail market and hires workers to assemble the components. A rocket ship sells for $30,000, and Acme can buy the components for each rocket ship for $27,000. Wiley and Sam are two workers for Acme. Sam can assemble 1/5 of a rocket ship per month and Wiley can assemble 1/10. If the labor market is perfectly competitive and rocket components are Acme’s only other cost, how much will Sam and Wiley be paid?   Instructions: Enter your responses as whole numbers. Sam will be paid $_____ per month Wiley will be paid $______ per month
Ma4. 1. Labor Markets (a) Sketch a graph of a competitive labor market for fast food workers, showing a hypothetical equilibrium wage and quantity of workers. (b) On that same graph (or a new one if it gets too hard to follow), show what would happen to labor demand and/or supply and the new equilibrium from each of the following changes: i. Childcare gets much more expensive. ii. Grocery stores begin paying their employees significantly more. iii. Better training allows workers to become 15% more productive. iv. Customers become more health-conscious and try to reduce their fast food intake.
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