Assume that the consulting and information technology industries employ people with similar skills. Suppose an increase in the demand for computer analysts leads to a rise in their wages, while the demand for consultants remains the same. The following graph shows the labor market for consultants in the United States.
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- Other than the demand for labor, what would be another example of a 'derived demand?Gopher Excavators produces shovels in a small factory and sells the shovels in a competitive market. The following table shows the company's production function: Labor Output (Shovels) (Number of workers) 0 0 1 100 2 195 3 275 4 340 5 380 Use the blue points (circle symbol) to plot the production function for Gopher Excavators on the following graph. (?) 400 O -O- 360 Production Function 320 280 240 200 160 120 80 40 0 O 0 2 2 5 LABOR (Number of workers) Calculate the marginal product of labor (MPL) of each worker, and then plot the MPL curve on the following graph using the blue points (circle symbol). Note: Remember to plot each point halfway between two integers. For example, when the number of workers increases from 0 to 1, the MPL of the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically connect the points. ? 100 90 80 70 60 50 40 30 20 OUTPUT (Shovels) MPL (Shovels per worker) 10 0 0 O 1 1 2…According to the Wall Street Journal, Mitsubishi Motors recently announced a major restructuringplan in an attempt to reverse declining global sales. Suppose that as part of the restructuring planMitsubishi conducts an analysis of how labour and capital are used in its production process. Priorto restructuring Mitsubishi’s marginal rate of technical substitution is 0.15 ( in absolute value). Tohire workers. Suppose that Mitsubishi must pay the competitive hourly wage of US$ 15. In thestudy of production process and markets where capital is procured, suppose that Mitsubishidetermine that its marginal productivity of capital is 0.5 small cars per hour at its new targetedlevel of output and that capital is procured in a highly competitive market. The same studyindicates that the average selling price of Mitsubishi’s smallest car is US$ 9500. Determine therate at which Mitsubishi can rent capital and marginal productivity of labour at its new targetedlevel of output. To minimize costs…
- Consider a manufacturing firm in a labor market that isperfectly competitive. There are two kinds of workers: productiveworkers whose marginal revenue product is $48,000 per year, andlazy workers whose marginal revenue product is $40,000 per year. Itis difficult for the firm to differentiate between productive andlazy workers. A local college offers a new yearlong astronomy course. Althoughthe cost of tuition is the same for both types of workers, thepsychic cost of having to work hard and get a passing grade islower for productive workers because they are able to learn morequickly than lazy workers. Therefore, the cost of taking the class(including the cost of tuition as well as the psychic cost) is$5,000 per year for a productive worker and $10,000 per year for alazy worker. Because astronomy has little relevance tomanufacturing, taking the class does not increase or decrease aworker's productivity. The firm uses the class as a way to differentiate betweenproductive and lazy…5 For each of the following examples, choose the case with the lower (more inelastic) wage elasticity. Assume an $18 per hour wage rate: Serpent Brewing is a brewery in Nova Scotia. Would you expect Serpent Brewing's demand for beer tasters to have a lower wage elasticity than their beer production line workers? Explain. Nova Scotia's Non-Essential Pesticides Control Act, which came into effect in 2012, covers the "cosmetic" use of pesticides for lawn care and ornamental plants on residential, commercial, government, and institutional properties. Would you expect a farms demand for farm labour for weeding, in a jurisdiction where herbicides are banned for environmental reasons to have a lower wage elasticity than a jurisdiction where they are not? Explain. A coal mine's demand for labour, where the mine has a local monopoly in the sale of coal, versus a mine that sells coal in a competitive market. The demand for workers in a tobacco (cigarette) factory versus the demand for…According to the Wall Street Journal, Mitsubishi Motors recently announced a major restructuring plan in an attempt to reverse declining global sales. Suppose that as part of the restructuring planMitsubishi conducts an analysis of how labour and capital are used in its production process. Prior to restructuring Mitsubishi’s marginal rate of technical substitution is 0.15 ( in absolute value). To hire workers. Suppose that Mitsubishi must pay the competitive hourly wage of US$ 15. In thestudy of production process and markets where capital is procured, suppose that Mitsubishi determine that its marginal productivity of capital is 0.5 small cars per hour at its new targeted level of output and that capital is procured in a highly competitive market. The same study indicates that the average selling price of Mitsubishi’s smallest car is US$ 9500. Determine the rate at which Mitsubishi can rent capital and marginal productivity of labour at its new targeted level of output. To minimize…
- WAGE RATE Assume that the accounting and actuarial industries employ people with similar skills. Suppose an increase in the demand for actuaries leads to a rise in their wages, while the demand for accountants remains the same. The following graph shows the labor market for accountants in the United States. Show the effect of the rise in demand for actuaries on the U.S. labor market for accountants by shifting the labor demand curve, the labor supply curve, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. QUANTITY OF LABOR о Supply Demand Demand Supply As a result, the wage rate for U.S. accountants and the level of employment ?Complete the following table with the profit-maximizing quantity of labor each salon will hire, along with the wage it will pay for each hour of labor. Labor Wage Town 1 Town 2 In Town 1, the salon pays a wage that is wage is the marginal value product of the final unit of labor hired, whereas in Town 2, the the marginal value product of the final unit of labor hired. The outcome in with respect to changes in the wage. is farther from that of a competitive market, given that the supply of labor is elastic (at the market equilibrium)11. Calculating the price elasticity of supply Dina is a stay-at-home parent who lives in Denver and does some consulting work for extra cash. At a wage of $25 per hour, she is willing to work 6 hours per week. At $35 per hour, she is willing to work 16 hours per week. Using the midpoint method, the elasticity of Dina's labor supply between the wages of $25 and $35 per hour is approximately that Dina's supply of labor over this wage range is which means
- 1. The demand for labor Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley's production schedule for strawberries is given in the following table: Labor Input Total Output (Number of workers) (Pounds of strawberries) 0 WAGE RATE (Dollars per worker) 300 Suppose that the market wage for strawberry pickers is $170 per worker per day, and the price of strawberries is $12 per pound. 270 On the following graph, use the blue points (circle symbol) to plot Live Happley's labor demand curve when the output price is $12 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the marginal revenue product of the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically connect the points. 240 210 180 150 120 90 60 30 1 0 2 3 4 5 0 0 18 34 48 60 70…Use the table below to answer questions about a firm's hiring decision. Labor (workers) Output (units) Total Cost ($) $50 1 15 $60 2 27 $70 3 37 $80 45 $90 5 50 $100 What is the total cost when the marginal product of labor is 10? Choose one: O A. $60 о в. $30 O C. $20 O D. $50 O E. $70 O F. $10 O G. $90 O H. $40 O . $100 O J. $80 4.9. Consider an isoquant/isocost diagram, with labour measured on the horizontal axis and capital measured on the vertical axis, which can then be used to derive a demand for labour diagram. Following a rise in the wage rate, which of the following statements would accurately describe the changes on the firm's demand curve for labour? (a) There would be a movement up the demand curve for labour and the smaller is the substitutability between the inputs, the more inelastic will be the demand curve for labour. (b) There would be a movement down the demand curve for labour and the smaller is the substitutability between the inputs, the more inelastic will be the demand curve for labour.