EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Question
Chapter 13.1, Problem 1MQ
To determine
Whether workforce working under
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
The following table shows the relationship between workers and output for a factory in the short run, with capital held constant. This firm is a monopoly in the output market, and price and marginal revenue for the
firm are also given in the table. Find the marginal revenue product of labor (MRPL).
Marginal Physical Product (MPPL)
Labor Input
0
1
2
3
4
5
If the wage rate is $408, this firm will hire
0
20
14
12
9
3
workers. In general, a monopolist will employ
Price of Output
(P)
40
39
38
37
36
35
Marginal Revenue (MR)
38
36
34
32
30
workers than a similar competitive firm.
MRPL
760
504
408
288
90
Imagine there is a firm that only uses labor to produce goods and that its production function is given by Y(L)=5L-L^2. The price of the firm’s output is equal to 1. Let’s assume the firm is a price taker on the product market but is a local monopsony for employment. Imagine that its marginal cost is given by 2+L. Imagine that labor supply is given by 1+L
How much labor does the firm want to use?
What will be the wage it pays?
How many people will work if the government imposes a minimal wage of 2.25?
How will this affect the firm’s profit? Calculate and compare before and after the introduction of the minimum wage.
Consider the housing construction industry. Assume that the industry is perfectly competitive in both input and output markets. Suppose that, through
collective bargaining, a labor union negotiates an industry-wide wage for various kinds of labor (electricians, plumbers, and so on). In particular, it
succeeds in negotiating a wage increase for carpenters from $15 to $20 per hour.
The following graph shows the labor demand of an individual firm.
On the following graph, show what happens at the firm level as a result of the union negotiations.
WAGE RATE
30
25
20
10
5
0
0
12
36
48
QUANTITY OF LABOR
24
Supply
Demand
60
72
Demand
Supply
?
Chapter 13 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 13.1 - Prob. 1MQCh. 13.1 - Prob. 2MQCh. 13.2 - Prob. 1TTACh. 13.2 - Prob. 2TTACh. 13.3 - Prob. 1MQCh. 13.3 - Prob. 2MQCh. 13.5 - Prob. 1MQCh. 13.6 - Prob. 1MQCh. 13.6 - Prob. 1TTACh. 13.6 - Prob. 2TTA
Ch. 13.6 - Prob. 1.1TTACh. 13.6 - Prob. 2.1TTACh. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Prob. 5RQCh. 13 - Prob. 6RQCh. 13 - Prob. 7RQCh. 13 - Prob. 8RQCh. 13 - Prob. 9RQCh. 13 - Prob. 10RQCh. 13 - Prob. 13.1PCh. 13 - Prob. 13.2PCh. 13 - Prob. 13.3PCh. 13 - Prob. 13.4PCh. 13 - Prob. 13.5PCh. 13 - Prob. 13.6PCh. 13 - Prob. 13.7PCh. 13 - Prob. 13.8PCh. 13 - Prob. 13.9PCh. 13 - Prob. 13.10P
Knowledge Booster
Similar questions
- The nation of Ectenia has 20 competitive apple orchards, all of which sell apples at the world price of $2 per apple. The following equations describe the production function and the marginal product of labor in each orchard: Q=100 L-L2 MPL = 100-2L Where Q is the number of apples produced in a day, L is the number of workers, and MPL is the marginal product of labor a. What is each orchard's labor demand as a function of the daily wage W? What is the market's labor demand? b.Ectenia has 200 workers who suply their labor inelastically. Solve for the wage W How many workers does each orchard hire ? How much profit does each orchard owner make? c.Calculate what happens to the income of workers and orchard owners if the world price doubles to $4per apple. d. Now suppose the price is back at $2 per apple, but a hurricane destroys half the orchards. Calculate how the hurricane affects the income of each worker and of each remaining orchard owner. What happens to the income of Ectenia as a…arrow_forwardB. Consider a firm who sells output at p=10 and has a short run production function Q(L)=20L-L2. Its wage rate function is w=40+2.5L. Suppose the firm is a monopsonist, how much labor will it hire to maximize profits?arrow_forwardA pizzeria, which operates in a perfectly competitive hospitality market, can produce pizzas if it has its premises and a pizza oven (which cost £10 per night), ingredients (£3 per pizza), and workers (each of whom earn £40 per night). The number of pizzas that can be produced per night, depending on the number of workers employed by the pizzeria, is given in the following table: Workers employed 1 2 3 4 5 Pizzas per night 20 36 48 56 60 HINT: In the following, you will be asked to draw curves in diagrams based on the above table. In each diagram, please proceed as follows: First, place a dot in the diagram, each representing a column in the table. Second, label each dot with its coordinates. Third, connect dots with straight lines to obtain the required curve. a) Draw the production function as number of pizzas per night depending on the number of workers employed. b) Briefly describe the shape of your production function and explain the reasons for this shape. c) Draw the total cost…arrow_forward
- A pizzeria, which operates in a perfectly competitive hospitality market, can produce pizzas if it has its premises and a pizza oven (which cost £10 per night), ingredients (£3 per pizza), and workers (each of whom earn £40 per night). The number of pizzas that can be produced per night, depending on the number of workers employed by the pizzeria, is given in the following table: Workers employed 1 2 3 4 5 Pizzas per night 20 36 48 56 60 HINT: In the following, you willI be asked to draw curves in diagrams based on the above table. In each diagram, please proceed as follows: First, place a dot in the diagram, each representing a column in the table. Second, label each dot with its coordinates. Third, connect dots with straight lines to obtain the required curve. c) Draw the total cost function. d) Explain how the firm can use this cost function to determine its profit maximising quantity.arrow_forwardA pizzeria, which operates in a perfectly competitive hospitality market, can produce pizzas if it has its premises and a pizza oven (which cost £10 per night), ingredients (£3 per pizza), and workers (each of whom earn £40 per night). The number of pizzas that can be produced per night, depending on the number of workers employed by the pizzeria, is given in the following table: Workers employed 1 2 3 4 5 Pizzas per night 20 36 48 56 60 HINT: In the following, you will be asked to draw curves in diagrams based on the above table. In each diagram, please proceed as follows: First, place a dot in the diagram, each representing a column in the table. Second, label each dot with its coordinates. Third, connect dots with straight lines to obtain the required curve. a) Draw the production function as number of pizzas per night depending on the number of workers employed. b) Briefly describe the shape of your production function and explain the reasons for this shape.arrow_forwardSuppose that you are one of rubber producers (sellers) in the perfectly competitive market in Thailand. Make it simple: suppose there are two types of used inputs consisting of land and workers. Assume that, in short-run production, you operate on a fixed size of a land and the cost of renting the land is 2 Baht per day. The table (A) below shows the relationship between the quantity of rubber produced by your company per day and costs of workers per day. The goal of your firm is to maximize (minimize) profits (losses).Table (A) The Quantity of rubber (units) produced per day Costs of workers per day in baht ATC AVC MC 0 0 1 5 2 9 3 12 4 14 5 15 6 18 7 22 8 27 9 33 10 40 Answer the following questions 1. Filling in Table (A) above for ATC, AVC and MC from 0 to 10 units. 2. Using economics analysis, suppose the market price of the rubber in Thailand is 3.5 Baht per unit, how…arrow_forward
- A pizzeria, which operates in a perfectly competitive hospitality market, can produce pizzas if it has its premises and a pizza oven (which cost £10 per night), ingredients (£3 per pizza), and workers (each of whom earn £40 per night). The number of pizzas that can be produced per night, depending on the number of workers employed by the pizzeria, is given in the following table: Workers employed 1 2 3 4 Pizzas per night 20 36 48 56 60 HINT: In the following, you willI be asked to draw curves in diagrams based on the above table. In each diagram, please proceed as follows: First, place a dot in the diagram, each representing a column in the table. Second, label each dot with its coordinates. Third, connect dots with straight lines to obtain the required curve. d) Explain how the firm can use this cost function to determine its profit maximising quantity. (Ctrl) e) Determine the firm's profit maximising quantity if the market price is £6, showing how you applied the method that you…arrow_forwardSuppose that in a competitive output market, firms hire labor from a competitive labor market (so that the profit maximization conditions for hiring labor are as we discussed in class). The firm has a fixed number of machines and can produce the following quantities (Q) associated with the number of workers (L) in a given time period. L Q 0 0 1 12 2 20 3 26 4 30 5 32 The market price of the good this firm sells is $5. If the firm pays a wage of w = $19.90 per time period, then how many units of labor should this firm hire to maximize profit? Group of answer choices a) 1 b) 3 c) 4 d) 2 e) 5arrow_forwardConsider the housing construction industry. Assume the industry is perfectly competitive in input and output markets. Suppose that, through collective bargaining, a labor union successfully negotiates an industry-wide wage for various kinds of labor (electricians, plumbers, and so on). In particular, it succeeds in negotiating a wage increase for carpenters from $12 to $16 per hour. The following graph shows the demand for labor and the supply of labor for the entire industry. On the following graph, use the purple points (diamond symbol) to plot the new industry supply curve. Then use the black point (plus symbol) to show the effect of the union negotiations on the quantity of labor demanded in the industry. WAGE RATE 20 10 QUANTITY OF LABOR Supply bemand Demand Supply Quantity ++ New supply of labor Quantityarrow_forward
- The demand for labor for a firm operating in a perfectly competitive output market equals ____. The demand for labor for a firm with market power in the output market equals ______. Would you expect the presence of labor unions to lead to higher or lower pay for worker-members? Would you expect a higher or lower quantity of workers hired by those employers? Explain briefly.arrow_forwardConsider a firm that sells output at P = 5 and has a short-run production function:Q(L) = 20L − L^2. Its wage rate function is w = 40 + 2L. - Suppose the firm is a monopsonist, how much labor will it hire to maximize profits?How much wage will it pay?- Solve for the rate of monopsonistic exploitation.- If instead, the firm is operating in a perfectly competitive market, how much laborwill it hire to maximize profits? How much wage will it pay?arrow_forward1. Consider a firm in a perfectly competitive industry that must decide how much labor to hire (in the short run, i.e., in the background the capital is fixed). The firm’s marginal product of labor is 110-5L. It takes as given an output price P = 2, and the wage = 20. a. Please calculate the optimal quantity of labor for this firm to hire within this setting. b. Would a monopsonist employer in this same situation hire more or less labor? Why? c. Discuss a possible basis for state regulations of employment within 'company towns'.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Principles of Microeconomics (MindTap Course List)EconomicsISBN:9781305971493Author:N. Gregory MankiwPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning