Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 9.3, Problem 4ST
To determine
Explain whether the firm earns a higher profit.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
When a firm is a perfect competitor in the product market, its demand curve for labor will _____ because the _____ product declines as additional workers are hired.
Select one:
a. slope downward; average
b. be horizontal; average
c. slope upward; marginal
d. slope downward; marginal
The following table shows the relationship between the number of trainers working at the new gym (SD Fitness) and the number of clients they can train per week. These clients represent the output of the firm. Clients pay $60 per hour.
Find the Marginal Product (MPL) for the 4th, 5th and 6th trainer.
Find the Value of Marginal Product (VMPL) of the 4th, 5th and 6th trainer.
SD Fitness’s trainers are paid $650 per week. How many trainers will the gym hire? How do you know?
Consider a profit-maximizing cotton candy firm that operates in a perfectly competitive output and labor market. Suppose there is a decrease in the price of good X, and the cross-price elasticity of demand for cotton candy with respect to good X is positive. How does this impact:
a. the wage paid to cotton candy workers
b. the amount of labor hired by the cotton candy firm?
Explain and show using well-labelled graphs.
Chapter 9 Solutions
Microeconomics
Ch. 9.1 - Prob. 1STCh. 9.1 - Prob. 2STCh. 9.1 - Prob. 3STCh. 9.1 - Prob. 4STCh. 9.2 - Prob. 1STCh. 9.2 - Prob. 2STCh. 9.2 - Prob. 3STCh. 9.2 - Prob. 4STCh. 9.3 - Prob. 1STCh. 9.3 - Prob. 2ST
Ch. 9.3 - Prob. 3STCh. 9.3 - Prob. 4STCh. 9.4 - Prob. 1STCh. 9.4 - Prob. 2STCh. 9 - Prob. 1QPCh. 9 - Prob. 2QPCh. 9 - Prob. 3QPCh. 9 - Prob. 4QPCh. 9 - Prob. 5QPCh. 9 - Prob. 6QPCh. 9 - Prob. 7QPCh. 9 - Prob. 8QPCh. 9 - Prob. 9QPCh. 9 - Prob. 10QPCh. 9 - Prob. 11QPCh. 9 - Prob. 12QPCh. 9 - Prob. 13QPCh. 9 - Prob. 14QPCh. 9 - Prob. 15QPCh. 9 - Many plumbers charge the same price for coming to...Ch. 9 - Prob. 17QPCh. 9 - Prob. 18QPCh. 9 - Prob. 1WNGCh. 9 - Prob. 2WNGCh. 9 - According to the accompanying table, what quantity...Ch. 9 - Prob. 4WNGCh. 9 - Prob. 5WNGCh. 9 - Prob. 6WNGCh. 9 - Prob. 7WNGCh. 9 - Prob. 8WNGCh. 9 - Prob. 9WNGCh. 9 - Prob. 10WNG
Knowledge Booster
Similar questions
- Use the following image to answer: The first is a (human) worker, who must be paid $18 for each hour they spend producing chairs. The second is a robot, that costs $15 of inputs (including electricity and maintenance) for each hour it works. Assume that the sale price of chairs is always sufficiently high that it is profitable to fulfill this 80-chair order. The firm needs to make 80 chairs to fulfill its order. Assume also that the firm is profit maximizing (& therefore cost minimizing). Now suppose that the local economy increases the minimum wage, and the price of an hour of a worker’s time increases from $18 to $27. 1) What does the principle of substitution say should happen to the firm’s use of (i) worker hours and (ii) robot hours? Pls show full calculationsarrow_forwardJess owns a firm that uses labour (L) and capital (C) to sell widgets (X), according to the following production function: X = F(L,C) = ln(L) + ln(C) Jesse buys her factors and sells her output in perfectly competitive markets. The market prices for L, C and W are a, r and p, respectively. What is the firm’s profit function. What is the firm's marginal product of labour , marginal product of capital and marginal rate of technical substitution Does the firm exhibit a diminishing marginal product of capital? What is the firms demand functions for labour and capital. Say the central bank decides to increase interest rates, causing ? to go up. What effect will this have on the firm’s use of L and C? What effect will it have on output (X) and profits?arrow_forwardIf the marginal revenue earned by a firm due to an additional unit of worker is less than the marginal cost of hiring him, _____. a.the firm should not hire the worker b.the firm should hire the worker c.the firm should not operate in the long run d.the firm should not differentiate its productsarrow_forward
- Candice’s’ Cookies is a new cookie delivery company in Gainesville, Florida. The firm hires local college students to sell cookies door-to-door in higher income neighborhoods. Each of these “Sales Associates” sells cookies, which increases Candice’s Cookies’ total revenue, but must be paid an hourly wage. The graph below depicts Candice’s Cookies’ demand for labor curve when the retail price of a cookie is $2. Show Transcribed Text Part (i): Suppose that the retail price of a cookie is $2.50. What is the marginal product of the 4th Sales Associate? 1 cookie 2 cookies 3 cookies 4 cookies 5 cookies Part (ii): Suppose that the retail price of a cookie is $2.50. What is the marginal product of the 6th Sales Associate? 1 cookie 2 cookies 3 cookies 4 cookies 5 cookies Part (iii): Suppose that the retail price of a cookie is $2. What is the marginal product of the 8th Sales Associate? 1 cookie 2 cookies 3 cookies 4 cookies 5 cookiesarrow_forwardConsider this graph represents McDonald's demand for labor. Choose the 2 scenarios that would shift the demand for labor from D1 to D3. Group of answer choices McDonalds buys a machine that can do the work of 5 human employees. (Long Run) Breaking News: All McDonald's food contains traces of rat poison. People decide to eat less. The Travis Scott meal is heavily promoted on social media increasing people's desire to eat at McDonalds more often. McDonalds buys a machine that can do the work of 5 human employees. (Short Run)arrow_forwardA firm employs two workers. Together, these workers produce 30 oranges. The firm hires a third worker. Total output rises to 36 oranges. If orange growing is a perfectly competitive market where the price of an orange is $0.50, find the value of the marginal product of labor of the third worker.arrow_forward
- Given the following parameters: Perfect Competition in Labour Market Perfect Competition in Output Market (Short Run) Wage = w = $10 Price = P = $20 Q = 6(L^0.5) Calculate the optimal amount of labour a. 32 b. 36 c. 24 d. 44 e. 16arrow_forwardWhich of the following can reduce the marginal revenue product of labor? Select one: a. A reduction in the demand for firms– products. b. A reduction in workers– supply of labor to firms. c. A decrease in firms– demand for inputs that substitute for labor. d. An increase in the extra output firms gain from adding another unit of labor.arrow_forwarddefine these terms Push factors Pull factors Tenements Sweatshops Settlement Houses Jane Addams Hull House Jacob Riis Triangle Shirtwaist Firearrow_forward
- The demand for carpenters is driven by demand for wood furniture produced by that labor. This concept is referred to as Group of answer choices Tied demand Second law of demand Derived demand Factor demand Churchill's Book Binding Labor (workers) Output (Books) 0 0 1 200 2 280 3 340 4 380 5 400 Churchill’s book binding is a firm operating in a perfectly competitive market. What is the marginal product of the third worker? Group of answer choices 80 60 120 0 Please answer to two of these questionsarrow_forwardThe least-cost rule states that a firm should employ labor such at the marginal product per dollar spent on labor is equal to Multiple Choice the marginal product per dollar spent on capital. the wage rate. the marginal cost of labor. the marginal product of labor.arrow_forwardExplain the following applying supply and demand analysis: High wages for U.S. engineers High wages for Irish engineers living on the “Emerald Isle” High wages for white males in many industries throughout the U.S. Low wages for many Wal-Mart employees (non-mgmt) High salaries for accounting and econ instructors and lower wages for PhD’s in historyarrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning