EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Question
Chapter 23, Problem 6RQ
To determine
Evaluate the statement whether it is true or false.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Figure 9.2, U.S. Labor Market
Figure 9.2 represents the U.S. labor market. Assume that labor and capital are the only factors of
production. Also assume the initial supply schedule of labor is denoted by S, and consists entirely of
native U.S. workers. The demand schedule of labor is denoted by Do
Hourly Wage/S
O
O
18
Select one:
O
12
O
9
So
2
Consider Figure 9.2. Policies that permit Mexican workers to freely migrate to the United States would likely be resisted by:
S₁
a. U.S. capital owners
b. Native U.S. workers
3
Do
6
Quantity of
Labor
c. U.S. capital owners and native U.S. workers
d. Neither U.S. capital owners or native U.S. workers
. Suppose that a car dealership wishes to see if efficiency wages will help improve its salespeople’s productivity. Currently, each salesperson sells an average of one car per day while being paid $20 per hour for an eight-hour day. LO17.8
What is the current labor cost per car sold?
Suppose that when the dealer raises the price of labor to $30 per hour the average number of cars sold by a salesperson increases to two per day. What is now the labor cost per car sold? By how much is it higher or lower than it was before? Has the efficiency of labor expenditures by the firm (cars sold per dollar of wages paid to salespeople) increased or decreased?
Suppose that if the wage is raised a second time to $40 per hour the number of cars sold rises to an average of 2.5 per day. What is now the labor cost per car sold?
If the firm’s goal is to maximize the efficiency of its labor expenditures, which of the three hourly salary rates should it use: $20 per hour, $30 per hour, or $40 per hour?…
The figure shows the U.S. supply of labor curve. What would be the effect on the labor
supply curve of U.S. policies that restrict immigration?
O A. A rightward shift of the supply of labor curve
O B. A movement downward along the supply of labor curve from a point such as A to
a point such as B
O C. A movement upward along the supply of labor curve from a point such as C to a
point such as B
O D. A leftward shift of the supply of labor curve
OE. None of the above answers are correct because there would be no change in the
supply of labor curve.
Real wage rate (2009 dollars per hour)
100
75
50
25
0
100
LS
+
400
200
300
Labor (billions of hours per year)
Chapter 23 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
Knowledge Booster
Similar questions
- A software company in Silicon Valley uses programmers (labor) and computers (capital) to produce apps for mobile devices. The firm estimates that when it comes to labor, MPL = 5 apps per month while PL = $1,000 per month. And when it comes to capital, MPC = 8 apps per month while PC = $1,000 per month. If the company wants to maximize its profits, it should: LO16.5 a. Increase labor while decreasing capital. b. Decrease labor while increasing capital. c. Keep the current amounts of capital and labor just as they are. d. None of the above.arrow_forwardThe following labor market graph applies to questions 13-16. Consider the following competitive labor market situation before and after a tax is levied on labor suppliers. (This would be as if the companies did not withhold any taxes from workers' paychecks. The workers would always be the ones mailing in any taxes owed on their pay from the firms.) W wd Wo Ws Imp E L L₁ Lo D(no tax) D. (with tax) L 13. Before the tax is imposed, firms' surplus is given by the area A + B + C. This surplus measures O the workers' addition to profit. O how much the firm is paying the workers. O how much more the workers are getting paid compared the combined minima the workers are willing to work for. O the firms' combined revenues. O the size of the wage.arrow_forwardPROBLEMS 1. Workers are compensated by firms with “benefits” in addition to wages and salaries. The most prominent benefit offered by many firms is health insurance. Suppose that in 2000, workers at one steel plant were paid $20 per hour and in addition received health benefits at the rate of $4 per hour. Also suppose that by 2010 workers at that plant were paid $21 per hour but received $9 in health insurance benefits. LO17.1 By what percentage did total compensation (wages plus benefits) change at this plant from 2000 to 2010? What was the approximate average annual percentage change in total compensation? By what percentage did wages change at this plant from 2000 to 2010? What was the approximate average annual percentage change in wages? If workers value a dollar of health benefits as much as they value a dollar of wages, by what total percentage will they feel that their incomes have risen over this time period? What if they only consider wages when calculating their incomes?…arrow_forward
- Question 14 Human capital is H-e0.07*5), where S is the number of years of schooling. What is the ratio of the productivities of the persons having 9 and 12 years of schooling, respectively. Hint: This will be the ratio of their wages in the competitive labor ratio of their wages in the competitive labor market. O 0.81 0.95 O 1.03 O 1.54arrow_forwardFigure 3.2 Si 15 S2 10 5. D2 Di 20 30 40 Quantity of Labor In Figure 3.2, assume that we have labor market demand and supply curves of D2 and S1, respectively. What is the equilibrium wage and employment level? O $15; 30 workers O 5; 30 workers $5; 20 workers O $10; 40 workers Wage Rate ($ per day)arrow_forward7. LO 2, 4 Suppose that a consumer can earn a higher wage rate for working overtime. That is, for the first q hours the consumer works, he or she receives a real wage rate of w, and for hours worked more than q he or she receives w, where W2>W1. Suppose that the consumer pays no taxes and receives no nonwage income, and he or she is free to choose hours of work. (a) Draw the consumer's budget constraint, and show his or her optimal choice of consump- tion and leisure (b) Show that the consumer would never work hours, or anything very close to q Explain the intuition behind this. (c) Determine what hours. happens if the overtime wage rate w2 increases. Explain your results in terms of income and substitution effects. You must consider the case of a worker who initially works overtime, and a worker who initially does not work overtime.arrow_forward
- 4. Suppose that low-skilled workers employed in clearing woodland can each clear one acre per month if each is equippedwith a shovel, a machete, and a chainsaw. Clearing one acrebrings in $1,000 in revenue. Each worker’s equipment coststhe worker’s employer $150 per month to rent and each workertoils 40 hours per week for four weeks each month. LO17.6 a. What is the marginal revenue product of hiring one lowskilled worker to clear woodland for one month?b. How much revenue per hour does each worker bring in?c. If the minimum wage were $6.20, would the revenue perhour in part b exceed the minimum wage? If so, by howmuch per hour?d. Now consider the employer’s total costs. These includethe equipment costs as well as a normal profit of $50 peracre. If the firm pays workers the minimum wage of$6.20 per hour, what will the firm’s economic profit orloss be per acre?e. At what value would the minimum wage have to be set sothat the firm would make zero economic profit fromemploying an…arrow_forwardLO. Graphically illustrate the labor market's situation in case of a minimum wage enforcement. Discuss with at least 200 words.arrow_forwardFigure Al Wage MC $30 $23 $16 $12 D 8. 11 13 Labor Refer to Figure A1. If the government set a minimum wage of $15 an hour, what could the level of employment be? O 13 O 8 O 10 O 11arrow_forward
- Ella owns a factory that produces kitchen knives. She has eight employees, with which her factory can produce 120 knives per day. If she hired a ninth employee, she'd be knives. able to produce 130 wheelbarrows per day. Therefore, the marginal product of the ninth employee is O 12 O 10 O 15 O 14 O 11arrow_forwardA dozen eggs cost $1.22 in January 1990 and $2.33 in January 2016. The average wage for workers in private industries was $10.02 per hour in January 1990 and $21.33 in January 2016. By what percentage did the price of a dozen eggs rise? 48% 91% 111% By what percentage did the wage rise? O 21% 94% 113% In order to earn enough to buy a dozen eggs, a worker had to work. Workers' purchasing power in terms of eggs minutes in January 1990 and between 1990 and 2016. minutes in January 2016.arrow_forwardSuppose that low-skilled workers employed in clearing woodland can each clear one acre per month if each is equipped with a shovel, a machete, and a chainsaw. Clearing one acre brings in $1,000 in revenue. Each worker’s equipment costs the worker’s employer $150 per month to rent and each worker toils 40 hours per week for four weeks each month. LO17.6 Now consider the employer’s total costs. These include the equipment costs as well as a normal profit of $50 per acre. If the firm pays workers the minimum wage of $6.20 per hour, what will the firm’s economic profit or loss be per acre? At what value would the minimum wage have to be set so that the firm would make zero economic profit from employing an additional low-skilled worker to clear woodland?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education