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 37, Problem 3DQ
To determine
Wage inflexibility.
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
. 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?…
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.
The 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.
Chapter 37 Solutions
EP ECONOMICS,AP EDITION-CONNECT ACCESS
Knowledge Booster
Similar questions
- Suppose 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_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_forwardYou said that "this may result in a steeper AS curve due to the fact that firms can produce more output for a given price level.". However, I think that steeper AS without the change of y-intercept(shift) will have opposite effect. I drew a diagram to compare different As curves with same y intercept and different slopes. It is clear that for same level; of price level, steeper AS has loer output (Y2) than faltter AS (Y1), could u please explain it for me? Thanks a lot :)arrow_forward
- (a) unemployment in the originating nation, (b) remittances * How might the output and income gains from immigration shown by the simple immigration model be affected by themployment in the originating nation, (b) remittances inmigrants to the home country, and (c) backflows of migrants to the home country? LO23.3 migrants to the home country? LO23.3 shown by the simple immigration model be affected byarrow_forward4. 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_forwardThe table below shows your production function relating output per number of hired workers (assume no changes to the capital and size of the convenient store. Use the given information to find the Marginal Product of Labor. Workers Total Output 0 0 1 2 3 4 LO 5 90 149 182 197 202 Marginal Product A OHire a number of workers where marginal product is positive OHire a number of workers where marginal product is negative OHire the number of workers where marginal product is maximized — ← What should determine the number of workers to hire if your goal is to maximize efficiency? OHire as many employees as possible OHire the minimum number of workersarrow_forward
- Employment 0 1 2 3 4 5 6 Labor Demand Data Total Product 0 15 28 о Multiple Choice о O $18 $17 39 48 55 60 $15 $16 Product Price $2.20 2.00 1.80 1.60 1.40 1. 20 1.00 The table shows labor demand data on the left and labor supply data on the right. What will be the profit-maximizing wage rate? Labor Supply Data Employment 0 1 2 3 4 LO 5 6 Wage Rate $15.00 16.00 17.00 18.00 19.00 20.00arrow_forwardIn 1950, Congress raised the federal minimum wage to seventy-five cents ($0.75) per hour. The CPI in 1950 was equal to 24, and now it is equal to about 240. What would the 1950 minimum wage be equal to in terms of today's dollars? O $3.20 O $7.50 O $5.30 O $4.10arrow_forwardThe figure below shows the wage-setting curve and the real wage w*. Which of the following statements is correct? Real wage 0.5 1 O O Wage-setting curve Select one: O O 1 0.76 Share of the working-age population a. The unemployment rate is 5%. b. The participation rate is 76%. Labour force 0.8 c. The employment rate is 95%. d. 4% of the population is unemployed.arrow_forward
- Question 25 In 1950, Congress raised the federal minimum wage to seventy-five cents ($0.75) per hour. The CPI in 1950 was equal to 24, and now it is equal to about 240. What would the 1950 minimum wage be equal to in terms of today's dollars? O $7.50 O $5.30 O $4.10 O $3.20arrow_forwardApproximately how many people are employed in the federal bureaucracy? O 1 million-1.4 million O 1.5 million -1.7 million O2 million-2.4 million O 2.5 million - 3 millionarrow_forwardRefer to the following table. What is the average product of the 4th worker? Number of Workers 0 1 2 3 4 LO 5 6 Units of Capital 4 units of output LO 5 LO 5 5 5 5 5 LO 5 Group of answer choices 3 units of output 16 units of output 6 units of output Output 0 2 LO 5 9 16 22 23arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Brief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage LearningEssentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337091985/9781337091985_smallCoverImage.gif)
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337091992/9781337091992_smallCoverImage.gif)
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning