Macroeconomics
Macroeconomics
11th Edition
ISBN: 9781260506891
Author: Colander
Publisher: MCG
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Chapter 4, Problem 1IP
To determine

Effect of limited jobs in the determination of wages.

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During last summer you agreed with your neighbors to mow their lawn for $20 per hour of work. This year they will require your services again during the summer vacation, should you ask for a higher wage or not?explain your answer.
A competitive, profit-maximizing firm pays its workers a wage of $500 per day.  The last worker they hired increased their production by 20 units per day. What must be the price that their product sells for?
Jane is the General Manager at a new café and wants to hire a few baristas.  The going rate for baristas is $15 per hour.  Jane has heard that many of the local coffee shops have high turnover with baristas “ghosting” them – simply not showing up for their shifts and never coming back.  Jane starts to put together an advertisement to hire baristas for $15 per hour, but changes her mind and lists the wages she will pay at $20 per hour.  Why would Jane pay $15 per hour?  What’s her rationale for paying $20 (or any wage higher than $15)?
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