Question Three Firm's Demand for Labour in the Short Run a) What are the two profit-maximizing decision rules for the employment of labour? b) Illustrate a firm's short-run demand for labour in a perfectly competitive market. Explain why it is as is.
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- 1)Graphically illustrate and explain the equilibrium position of a firm operating in aperfectly competitive labour market.The market demand for labour is the sum of all the individual firms’ demand curves. Identify four factors that can cause the market demand curve to shift.Why are labour markets imperfect?Give five reasons1. The market price for tomatoes is $2/pound. Lynn is too small to influence the price of tomatoes. Her tomato (short-run) production function is given by q= L3 where L measures hours of labor and q measures pounds of tómatoes. (a) demand curve for labor. Lynn hires labor from a competitive labor market. Find her short run (b) elastic than her short-run demand for labor? Explain your answer. Would you expect Lynn's long-run demand for labor to be more or lessWhen 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
- Question 1 The market for drones is perfectly competitive. Labor is the only variable input. The fixed cost is $500. Based on the information in the table below, what is the Marginal Product of Labour when Q-300? Enter a number only, drop the $ sign. Wage rate $100 per unit of Labour Quantity of Quantity of Labour Output 2 49 119 300 15 26 51 400Describe the construction of the firm’s demand curve for labour in the short run. Describe the relationship between the firm's demand curve for labour in the short-run and the market demand curve for labour in the short-run. In particular, is one curve likely to be more or less elastic than the other? Can you please specify why the curve is more elastic than the other. And include diagramUsing a diagram explain what happens to the long-run demand curve for labor if the price of labour increases? Decompose the changes into scale and substitution effects.
- Completed 0 out of 30 Resources Submit Question 24 of 30 What is the elasticity of demand for labor? A measure of how upset your boss is when his employees ask for more money. O A measure of how responsive firms' supply of labor is to changes in the wage rate. A measure of the extra revenue earned by the firm resulting from hiring one more unit of labor. A measure of how much firms' profits are affected by changes to wages. A measure of how sensitive the amount of labor firms will hire is to changes in the wage rate. A measure of the sensitivity of wage rates to the unemployment rate. Suppose you discover that your boss has a demand for labor that is very elastic. What does this imply in terms of y requesting a raise? Your boss may likely eliminate some positions (fire some people) if wages rise. Your boss will maintain the exact same labor force (not fire or hire anyone) if wages rise. Your boss is a flexible and undertanding person, so he or she is likely to accomodate any request…(a) Why does the labour demand curve slope downwards? (b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above. Question 4 Using your knowledge and understanding of supply and demand analysis to graph the following and explain your graph: (a) an increase in labour productivity. (b) an increase in preference for work. (c) the trade union withdraws labour through a strike.(a) Why does the labour demand curve slope downwards? (b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above.
- (a) Why does the labour demand curve slope downwards? (b) A garment factory’s production function is provided in the table. The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above.What does the assumption of market clearing imply (Explain) How applicable is this assumption to the labour marketing in the long run (Explain) and short run (Explain) How applicable is this assumption to the market for fast food meals in the long run? (Explain) and short run (Explain)Question 3 (a) Why does the labour demand curve slope downwards? (b) A garment factory's production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 48 4 56 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory's brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above.
