Labor and Wages The following chart provides information on a firm that hires labor competitively and sells its product in a competitive market. Units of Labor Total Product Output Price 14 $5 26 $5 3 37 $5 4 46 $5 53 $5 58 $5 a. How many units of labor would be employed if the market wage rate were $40? Why? b. What would happen to employment if the wage rate rose to $50? Explain your answer.

Labor and Wages The following chart provides information on a firm that hires labor competitively and sells its product in a competitive market. Units of Labor Total Product Output Price 14 $5 26 $5 3 37 $5 4 46 $5 53 $5 58 $5 a. How many units of labor would be employed if the market wage rate were $40? Why? b. What would happen to employment if the wage rate rose to $50? Explain your answer.

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter12: The Supply Of And Demand For Productive Resources

Section: Chapter Questions

Problem 12CQ

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Similar questions

Name some factors that can cause a shift in the demand curve in labor markets.
Other than the demand for labor, what would be another example of a 'derived demand?
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?
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Table 14.10 shows levels of employment (Labor), the marginal product at each of those levels, and the price at which the film can sell output in the perfectly competitive market where it operates. What is the value of the marginal product at each level of labor? If the firm operates in a perfectly competitive labor market where the going market wage is 12, what is the films profit maximizing level of employment?
Use a graph of labor supply and labor demand to illustrate the impact of each of the folllwing events on the equilibrium wage rate and the equilibrium level of employment in a labor market. (Analyze these as two separate unrelated events). Be sure to label your graph clearly to show the direction of the shift as well as an initial equilibrium and the new equilibrium after the event. A. A decline in the productivity of this type of labor B. An increase in the preference for work versus leisure.