Ian works at an iron smelter in Pittsburgh, the center of iron production in America. Due to the difficulty in measuring the productivity of individual employees, Ian's employer as well as the other iron smelters all pay an efficiency wage. Adjust the wage line on the graph to reflect this situation. What characteristic of efficiency-wage jobs is not supported by the situation shown in the graph? Efficiency wage jobs result in a surplus of workers at the wage being offered. Elevated wages serve as an economic incentive to work harder. The wage rate will eventually return to the market-clearing level. Efficiency wages result in an increase in the rate of unemployment. Wage ($ per hour) Quantity of workers (in thousands) Wage s

Ian works at an iron smelter in Pittsburgh, the center of iron production in America. Due to the difficulty in measuring the productivity of individual employees, Ian's employer as well as the other iron smelters all pay an efficiency wage. Adjust the wage line on the graph to reflect this situation. What characteristic of efficiency-wage jobs is not supported by the situation shown in the graph? Efficiency wage jobs result in a surplus of workers at the wage being offered. Elevated wages serve as an economic incentive to work harder. The wage rate will eventually return to the market-clearing level. Efficiency wages result in an increase in the rate of unemployment. Wage ($ per hour) Quantity of workers (in thousands) Wage s

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 3PA

See similar textbooks

Similar questions

Name some factors that can cause a shift in the demand curve in labor markets.
What is die price commonly called in the labor market?
Why are the factors that shift the demand for a product different from the factors that shift the demand for labor? Why are the factors that shift the supply of a product different from those that shift the supply of labor?
Table 14.11 shows levels of employment (Labor), the marginal product at each of those levels, and a monopolys marginal revenue. What is the monopolys marginal revenue product at each level of employment? If the monopoly operates in a perfectly competitive labor market where the going market wage is 20, what is the films profit maximizing level of employment?
What is the formula for the wage elasticity of labor supply?
Describe how the firm sets an efficiency wage above the competitive level. Why are there no market forces forcing the profit-maximizing firm to reduce the wage to the competitive l evel?
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…
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
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…
Suppose the supply of soccer players is give by the the equation Ls=W/10 and the valu of the marginal product is given by VMPL=100,000 - 100LD. Question 1 Compute the equilibrium number of players hired in a competitive labor market. Round to the nearest whole number. Question 2 Compute the equilibrium the wage paid to each player in a competitive labor market. Round to the nearest dollar.
It is easy to conclude that when hiring workers in the short run whose marginalproductivity rises, the average product of labor will rise as well. However, if workersproductivity declines, average product of labor may still be rising. Explain why this mayhappen.
Suppose that the price of sedans in the previous graph increases from $24,000 to $29,000 per car. This would cause the sedans to increase, which is reflected on the graph by a the supply curve. Suppose a technological improvement increases the speed with which robots can attach bolts to cars from 2,500 bolts per hour to 3,000 bolts per hour. Assuming that the wage rate remains the same, this would cause a the supply curve. This is because the technological improvement makes cars