Using these two plots (also on the L7 slides), explain what happens to the labor market (H and L) during the structural change of two industries when the country participates in international trade. Why the original wages (in autarky) can no longer be sustained in this case?
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- Using a diagram of the labor market, show the effectof an increase in the minimum wage on the wagepaid to workers, the number of workers supplied, thenumber of workers demanded, and the amount ofunemploymentWhat is the effect if the cost of labor increases? O Price increases, quantity increases O Price decreases, quantity decreases O Price decreases, quantity increases O Price increases, quantity decreasesExplain how the wage can adjust to balance thesupply and demand for labor while simultaneouslyequaling the value of the marginal product oflabor.
- Imagine a firm that employs two types of workers – some with computer skills and others withno technology related skills. (i) Explain how a firm’s production function is related to its marginal product of labour, howa firm’s marginal product of labour is related to the value of its marginal product and how afirm’s value of marginal product is related to its demand for labour. (ii) Explain how the wage can adjust to balance the supply and demand for labour whilesimultaneously equalling the value of the marginal product of labour.The lines on the graph are budget constraints, showing the tradeoff between labor and leisure. Suppose that when the wage changes, an individual chooses to move from point A to another point on the graph. For each of the other points, where would it belong on the backward bending labor supply curve? Backward‑bendingportionVerticalportionUpward‑slopingportion Answer Bank B D F C EIllustrate and examine how the individual supply of labor curve demonstrate the way an individual divides his/her time between work and leisure
- QUESTION 43 Figure 18-1 On the graph, L represents the quantity of labor and Q represents the quantity of output per week. 420 390 345 285 210 120 1 (i) (ii) (iii) (iv) O a. (ii) and (iv) only O b. (i) and (iv) only O c. (i) and (iii) only O d. (i) only 2 QUESTION 44 3 4 Refer to Figure 18-1. Based on the shape of the curve, the total product is increasing. total product is decreasing. marginal product is increasing. marginal product is decreasing. 5 6 LFigure 18b This figure below shows the labor market for automobile workers. The curve labeled S is the labor supply curve, and the curves labeled D1 and D2 are the labor demand curves. On the horizontal axis, L represents the quantity of labor in the market. 0 S D₁ What is measured along the vertical axis on the graph? O a. the wage paid to automobile workers O b. time spent by workers producing automobiles O c. the quantity of automobiles produced O d. the price of automobiles Lnent 6 from Chapter 8 Saved Help Save & Exit Submit High Tech, Inc. produces plastic chairs that sell for $10 each. The following table provides information about how many plastic chairs can be produced per hour. Number of Chairs Produced Workers Per Hour B:13 1 10 18 24 28 30 For simplicity, assume that labor is the only input. How many workers will be hired if the hourly wage for workers is $70? es Multiple Choice 1 MacBook Pro 3. 234 5
- Define marginal product of labor and value of the marginal product oflabor. • Describe how a competitive, profit-maximizing firm decides how many workersto hire.1. Optimal Use of a Single Input. Julian Smyth manages production at Taffy Apple Inc., a company that produces a variety of taffy/fruit candies. Over the last several months, he has varied the number of employees on his caramel apple production line from 5 to 12, and found the following relationship. Labor S67∞a 5 8 9 10 11 12 TP 50 90 150 200 240 270 290 300 MP VMP a. In the column labeled MP, calculate the marginal product of labor. b. Suppose the apples sell for $6 per (dozen) box. Calculate the Value Marginal Product (VMP) c. If labor costs $200 per day, how many laborers should the firm hire? NumberNumber Of Output Workers 1 50 110 300 4 450 590 665 700 8. 725 710 10 705 According to the above table, At what point does diminishing retums set in? O 4th labor 3rd labor O 1st labor O 2nd labor