PRINCIPLES OF MACROECONOMICS (LL)W/ACC.
7th Edition
ISBN: 9781264088980
Author: Frank
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 5RQ
To determine
Determine how talented entrepreneurs and effective managers can improve the average labor productivity.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Edith is the owner and manager of a small coffee shop that employs three workers who use the shop’s one coffee machine to make and serve coffee to paying customers. Business has begun to pick up; lines are getting longer every day in her shop. On a busy morning, she sees her baristas scrambling to take orders, get cups, fill coffee from the coffee machine, add cream and sugar, and serve customers in a timely manner. She figures if she hires three more baristas she’ll be able to sell twice as much coffee.
a. Adding more and more workers does not constantly increase production because of _______
SELECT THE CORRECT ANSWER
different productivity levels between various laborers.
diminishing marginal costs.
diminishing marginal product of labor.
substitutes in production.
Edith is the owner and manager of a small coffee shop that employs three workers who use the shop’s one coffee machine to make and serve coffee to paying customers. Business has begun to pick up; lines are getting longer every day in her shop. On a busy morning, she sees her baristas scrambling to take orders, get cups, fill coffee from the coffee machine, add cream and sugar, and serve customers in a timely manner. She figures if she hires three more baristas she’ll be able to sell twice as much coffee
Do you think she’s likely to be right? Why or why not?
Yes, hiring more workers will mean more customers can be served.
Yes, more workers will increase the supply and make more coffee available for sale.
No, more workers will just create more chaos behind the counter as the additional workers still have to wait to fill from the coffee machine.
No, the current workers just need better training to work more efficiently.
Adding more and more workers does not constantly increase…
Alexandro, a French national is working as a Manager in an international
company in the United States. Alexandro supervises about twenty two
product engineers and five technicians in an automobile manufacturing
unit. The technicians and engineers report to Alexandro every Tuesday of
the week to update of their work and Alexandro finds this very taxing and
cumbersome (stressful). In fact, Alexandro proposed to introduce a
paper-report system where all the employees he supervises can write and
submit paper-based reports. But, the management rejected his idea citing
more bureaucracy to which Alexandro told his immediate boss, "This is
how we do it in France. It is the right way and perhaps this should be
implemented here too." You understand that Alexandro has adopted:
A. Stereotyping
B. Ethnocentrism
C. Cultural pluralism
D. None of the above
Chapter 7 Solutions
PRINCIPLES OF MACROECONOMICS (LL)W/ACC.
Knowledge Booster
Similar questions
- Discuss the impact of the following factors on the optimal method of procuring an input. (LO1, LO3) a. Benefits from specialization. b. Bureaucracy costs. c. Opportunism on either side of the transaction. d. Specialized investments. e. Unspecifiable events. f. Bargaining costs.arrow_forwardUsing the demand and supply of loanable funds, demonstrate the effect of the following on the interest rate. As a result, what would you expect to be the impact of the change on growth? (LO9-3) a-Government increases spending. b-Businesses become more productive. c-The people as a whole save more.arrow_forwardSonya used to earn $25,000 a year selling real estate, but she now sells greeting cards. The return to entrepreneurship in the greeting cards industry is $14,000 a year. Over the year, Sonya bought $10,000 worth of cards from manufacturers and sold them for $58,000. Sonya rents a shop for $5,000 a year and spends $1,000 on utilities and office expenses. Sonya owns a cash register, which she bought for $2,000 with funds from her savings account. Her bank pays 3 percent a year on savings accounts. At the end of the year, Sonya was offered $1,600 for her cash register. Calculate Sonya’s explicit costs, implicit costs, and economic profit. Use the following information to work Problems 2 to 4. Yolanda runs a bullfrog farm. When she employs 1 person, she produces 1,000 bullfrogs a week. When she hires a second worker, her total product doubles. Her total product doubles again when she hires a third worker. When she hires a fourth worker, her total product increases but by only 1,000…arrow_forward
- Galaxy, a multinational corporation, has two plants, one in the United States and the other in Mexico, and it cannot change the size of the plants or the amount of capital equipment in the short run. The wage in Mexico is equivalent to US $5 per hour. The wage in the U.S. is $25 per hour. Given current employment situation, the productivity per worker in Mexico is 200 units per hour, and the productivity per worker in the U.S. is 400 units per hour.Is Galaxy maximizing output relative to its labor cost? If not, what should Galaxy do? Justify yourarrow_forwardWhat are spillover effects and how do they affect growth? (LO27-4)arrow_forwardCase C: Galaxy Multinational. Galaxy, a multinational corporation, has two plants, one in the United States and the other in Mexico, and it cannot change the size of the plants or the amount of capital equipment in the short run. The wage in Mexico is equivalent to US $5 per hour. The wage in the U.S. is $25 per hour. Given current employment situation, the productivity per worker in Mexico is 200 units per hour, and the productivity per worker in the U.S. is 400 units per hour. Is Galaxy maximizing output relative to its labor cost? If not, what should Galaxy do? Justify your answer.arrow_forward
- 1 ) On January 1, 2026 each of Boblandia's 100 workers has $1 in physical capital. Over the course of the year, its physical capital depreciates by 5%, and the number of workers increases by 5%. How much does Boblandia have to invest in 2026 to make sure that its capital to labour ratio is the same on January 1, 2027 as it was on January 1, 2026arrow_forwardDina is working for a consulting firm making $60,000 per year but considers starting her own consulting company. Dina has determined that to launch the business, she needs to invest $100,000 of her own funds. The annual cost of running the business will include $70,000 for the rent of the office space, $210,000 for employee wages, and $5,000 for materials and utilities. Dina plans to manage the business, which means that she will have to quit her current job. Suppose that the interest rate (or rate of return) on investments in the economy is 6%. Dina's total implicit cost per year is . Dina's total cost per year is .arrow_forwardMany countries, including Pakistan, import substantial amounts of goods and services from other countries. However, economists claim that a country can enjoy a high standard of living only if it can produce a large quantity of goods and services itself. Can you reconcile these two facts? (Maximum 100 words). Given the production function Y= AF (L, K, H, N), explain the determinants of productivity. ( Maximum100 words). Population growth has a variety of effects on productivity. Explain this statement and justify your answer. (Maximum 200 words).arrow_forward
- You are working a as quality consultant to several auditing firms. You earn an average salary of Php 40,000 per month. You have a part time job of fixing laptops and cellular phones. While employed, you can fix an average of 1 laptop and 3 phones every month. The profit of fixing one laptop is Php 2,500 and 1,000 per mobile phone. You have the chance of opening your own shop - a techno hub that specializes in fixing laptops and mobile phones. Your shop can expect a profit of Php 1500 per laptop and 500 per mobile phone (less all the expenses). For a month, you and your team can fix 20 laptops and 30 phones. a. If you want to earn more for a one year period, what alternative should you use?- Continue being a consultant and do your part time job or open up your own store? b. What is the difference in terms of profit?arrow_forwardDavid Ricardo ([1817] 1965) modified Smith’s model by introducing diminishing returns to land cultivation. Diminishing returns implies that as you apply more of a variable input (labor) to a fixed input (land), the productivity of each additional worker will eventually decline as long as technology isfixed. He claimed that land was of variable quality and finite. Thus, as an economy grows, population grows relative to land, and the productivity of the labor on the land will decline. According to Ricardo, the only way stagnation could be averted, at least temporarily, would be through the trade and imports of cheap food or wage goods. The essential doctrines of John Stuart Mill (1848) differed little, if at all, from those of Ricardo. He, like Smith, believed in the doctrine of laissez-faire , but he also recognized the possibility of modifying the system. He displayed a leaning to the socialist ideal, growing closer as his life advanced. He believed that we should sacrifice economic…arrow_forwardSuppose the economy of Utopia has a labor force of 600 workers, 100 units of capital and 400 hectares of land. It produces manufactured goods (M) which use labor (LM) and capital (K) in production and agricultural goods (A) which use labor (LA) and land (T) in production. The production functions are given by: QM = VR/LM %3D And Ly + LA = L = 600 In autarky, PA = PM = 10. %3D Suppose Utopia engages in trade and the price of manufactured goods, PM = 20. What happens to: 1. The workforce and output of manufactured goods? Of agricultural goods? 2. The nominal and real wage in Utopia? 3. The real return to capital and to land in Utopia? 4. Will everyone support trade?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