EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 23, Problem 2P
Sub part (a):
To determine
Cost per mug and labor cost per mug.
Sub part (b):
To determine
Wage difference per hour between the country.
Sub part (c):
To determine
Wage difference per unit between the country.
Sub part (d):
To determine
Relationship between higher labor cost per hour and higher labor cost per unit.
Sub part (e):
To determine
To determine: Migration of unskilled labor.
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Students have asked these similar questions
A firm can use three different production technologies, with capital and labour requirements at each level of output as follows:
Technology 1
Technology 2
Technology 3
Daily Output
K
L
K
L
K
L
100
3
7
4
5
5
4
150
3
10
4
7
5
5
200
4
11
5
8
6
6
250
5
13
6
10
7
8
a. Suppose the firm is operating in a high-wage country, where capital cost is $100 per unit per day and labour cost is $80 per worker per day. For each level of output, which technology is the cheapest?
Now suppose the firm is operating in a low-wage country, where capital cost is $100 per unit per day but labour cost is only $40 per unit per day. For each level of output, which technology is the cheapest?
Suppose the firm moves from a high-wage to a low-wage country but its level of output remains constant at 200 units per day. How will its total employment change?
The question below is based on the table below, which shows the relationship
between the number of workers and output of lumber (in tons per day).
Number of Workers
0
1
2
3
4
5
O 44
O 19
Total Output of Lumber
22
O 75
0
25
44
60
The marginal physical product of the second worker is?
O 25
70
75
You are an employer seeking to fill a vacant position on an assembly line. Are you more concemed with the average product of labor or the marginal product of labor
for the last person hired?
O A. The marginal product of labor because to maximize profits, you will want to hire labor up to but not exceeding the point where labor begins to experience
diminishing marginal returns.
O B. The average product of labor because productivity is maximized when average product is maximized This determines the output where revenue and profit
are maximized.
O C. The average product of labor because to maximize profits, you will want to hire labor up to but not exceeding the point where labor begins to experience
diminishing marginal returns
O D. The marginal product because it measures the effect the last person hired has on output, or total product. This helps determine the revenue generated by
hiring an another worker, which can be compared with the cost of hiring an another worker
Chapter 23 Solutions
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