LABOR ECONOMICS LOOSELEAF 8/E
8th Edition
ISBN: 9781264010516
Author: BORJAS
Publisher: MCG
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Question
Chapter 4, Problem 13P
To determine
The market clearing wage, number of workers employed,
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Consider the labour market for farms during the harvest season. Assume the market is perfectly competitive, with a labour demand function QD = 10-P and a labour supply function QS = 3P, where P is the wage.
a) What are the consumer (farm owners) surplus and producer (farm workers) surplus in equilibrium?
b) What is the price elasticity of demand at the equilibrium?
c) Suppose the government subsides the farm owners (consumers) $1 for every unit of labour purchased. Then, compute the quantity of labour traded in the market, the wage received by the workers and the wage paid by the farm owners.
d) Calculate the consumer surplus and producer surplus in the presence of the subsidy in part c).
Suppose that demand is given by p=10Y^(-1/5) and labor supply is w=4L^(2)
If marginal product is 10 and market price is 4 then
a. What is the wage in a competitive market
b. What is the wage in a market where the firm had monopoly power in the goods market
c. What is the wage in a market where the firm has monopoly power in the goods market
Answer it correctly please. I ll rate accordingly with multiple votes. Typed answer only.
In Market B, the market wage is w=20. Supply for labor is given by S(w)=8w, and demand for labor is D(w)=180-w. The price of output for the firms in this market is p=10. At the equilibrium, what is the marginal product of labor? (Just enter the number, no units)
Chapter 4 Solutions
LABOR ECONOMICS LOOSELEAF 8/E
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