Economics: Private and Public Choice (MindTap Course List)
15th Edition
ISBN: 9781285453538
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 26, Problem 3CQ
(a):
To determine
Differences in the wage of a lawyer and a minister.
(b):
To determine
Differences in the wage of an accountant and an elementary teacher.
(c):
To determine
Differences in the wage of a business executive and a social worker.
(d):
To determine
Differences in the wage of a country lawyer and a Wall Street lawyer.
(e):
To determine
Differences in the wage of a skilled, experienced craftsperson and a school dropout.
(f):
To determine
Differences in the wage of an upper-story window washer and ground-floor window washer.
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After instructor's review, the percentages were incorrect. upon examining the book the solution is still unknown on how to compute the correct information needed to solve.
What is the current labor utilization of each labor type?
Boeing created, and recently expanded, an airplane manufacturing center in Charleston, South Carolina. One of the factors that likely influenced this location decision is that South Carolina is a "right to work" state. This represents
a) a place factor related to labor.
b) a transportation factor related to the market.
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Q2) Samantha has an annual non-labour income of $5000. Suppose she has the total
available time of 4160 hours per year. Samantha's wage rate is $15 per hour, and she
chooses to work 2000 hours in a year. Suppose when Samantha's wage rate increases
from $15 to $18 per hour, she will work 2040 hours. At $18 per hour, if she works 2200
hours per year, she would be indifferent to her original work decision before the wage
increase.
a) Draw a diagram to show all the given information related to Samantha's work
circumstances. Calculate all the relevant income levels and label them in the graph.
b) Calculate Samantha's income effect, substitution effect and total effect related to the
wage increase. Show them in the diagram.
Chapter 26 Solutions
Economics: Private and Public Choice (MindTap Course List)
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Similar questions
- A perfect competitor charges a price of $30. The first worker he would hire would have a marginal physical product of 20, the second worker he would hire would have a marginal physical product of 18, the third worker would have a marginal physical product of 16, and the fourth worker would have a marginal physical product of 14. (a) How many workers would he hire if the wage rate were $540? worker(s) hired How much would his wage bill be? $ wage bill (b) How many workers would he hire if the wage rate were $470? worker(s) hired How much would his wage bill come to? $ wage bill.arrow_forwardKen has an annual non-labour income of $5000. Suppose he has the total available time of 52×80=4160 hours per year. Ken's wage rate is $15 per hour, and he chooses to work 2000 hours in a year. Suppose Ken’s wage rate rises from $15 to $18 dollars per hour, and he decides to work 2040 hours. At $18 per hour, if he worked 2200 hours per year, he would be indifferent to his original work decision before the wage increase Then: -Draw a diagram to show Ken’s choices before and after the wage increase. Calculate his maximum and optimal income before and after the wage change. And calculate the substitution effect, income effect and total effect generated by the wage change. Show these three effects in your diagram.arrow_forwardONLY ANSWER C & D Consider a firm with Total Output function (Production Function) given by Q = 6L2 – 0.4L3, where L is variable labor input. The firm is faced with the decision to hire the optimal number of workers in order to maximize its output level. (a) Obtain the Marginal Product function. (b) Find the Average Product function. (c) Determine the level of employment that would maximize the firm’s output level. (d) Verify that the second-order condition is met for the firm's output maximum.arrow_forward
- includes the wages paid to workers, the cost of any benefits the worker receives, and other expenses related to employing a worker. A) The price of labor (B) Marginal revenue product (C) The wage Take-home payarrow_forwardDiscuss how total earnings are determined for both piece-rate and time-rate workersarrow_forward(a) Why does the labour demand curve slope downwards? (b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above.arrow_forward
- The marginal product of labor is the additional: a) wage paid for an additional hour of work. b) wage paid for an additional worker employed. c) labor employed to produce one more unit of output. d) output produced by one more worker.arrow_forwardQ.1.20 An upward-sloping labour supply curve illustrates that ceteris paribus; (a) the quantity of labour supplied and the hours of work per week are directly related.(b) the quantity of labour supplied and the price of labour used to produce output are inversely related.(c) individuals use higher income to buy back leisure time.(d) a greater quantity of labour would be supplied at higher wage rates.arrow_forwardA firm in a perfectly competitive labor market is employing labor where the marginal revenue product of the last unit is $25 and the marginal factor cost is $30. Based on this, the firm should A-employ more units of labor. B-employ fewer units of labor. C-employ the same amount of labor D-lower its offered wage for labor. E-increase its offered wage for laborarrow_forward
- Bell’s Furniture, assemblers are paid according to the following differential piece rate scale: 1−20 dressers in a week, $7 each; 21−30 dressers, $9.50 each; and $14 each for every dresser over 30. Liz Henderson assembled 47 dressers in one week. Find her gross payarrow_forward(Based on Chapter 2, Problem 1 of Benjamin et al., 2031) Amit has $2000 of annual non-labour income. He has 80 hours per week that he can allocate between labour and leisure, for 80 x 52 = 4160 hours per year. His current wage rate is $20 per hour and he chooses to work 2200 hours a year. (a) Draw a leisure - labour diagram, clearly indicating Amit's current labour supply decision. (Your diagram should be clearly labeled and include Amit's budget line and an indifferent curve showing his leisure and consumption of goods and services at his optimal choice. Use the figures provided to find the y-intercept and his consumption if he doesn't work.) (b) Amit's wage rate increases to $25 per hour. In response, he increases his labour supply to 2300 hours. If he were "compensated" accordingly, at this new wage rate he would be just indifferent to working 2200 hours at his original wage rate and working 2400 hours at the new wage. Illustrate Amit's new optimal choice. Use the information…arrow_forwardNumber ofWorkersEmployed Output(Units) MarginalProduct(Units) Value ofMarginalProduct ($)(Market Price=1$) Value ofMarginalProduct ($)(Market Price=2$) 0 0 1 8 2 22 3 36 4 56 5 60 6 72 7 82 8 89 Derive Marginal Product and Value of Marginal Product from the following table when market price for the product is 1$ and 2$ .arrow_forward
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