Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 17.A, Problem 1ADQ
To determine
The percentage unionized by industry and occupation.
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4. Suppose that low-skilled workers employed in clearing woodland can each clear one acre per month if each is equippedwith a shovel, a machete, and a chainsaw. Clearing one acrebrings in $1,000 in revenue. Each worker’s equipment coststhe worker’s employer $150 per month to rent and each workertoils 40 hours per week for four weeks each month. LO17.6 a. What is the marginal revenue product of hiring one lowskilled worker to clear woodland for one month?b. How much revenue per hour does each worker bring in?c. If the minimum wage were $6.20, would the revenue perhour in part b exceed the minimum wage? If so, by howmuch per hour?d. Now consider the employer’s total costs. These includethe equipment costs as well as a normal profit of $50 peracre. If the firm pays workers the minimum wage of$6.20 per hour, what will the firm’s economic profit orloss be per acre?e. At what value would the minimum wage have to be set sothat the firm would make zero economic profit fromemploying an…
Suppose that low-skilled workers employed in clearing woodland can each clear one acre per month if each is equipped with a shovel, a machete, and a chainsaw. Clearing one acre brings in $1,000 in revenue. Each worker’s equipment costs the worker’s employer $150 per month to rent and each worker toils 40 hours per week for four weeks each month. LO17.6
Now consider the employer’s total costs. These include the equipment costs as well as a normal profit of $50 per acre. If the firm pays workers the minimum wage of $6.20 per hour, what will the firm’s economic profit or loss be per acre?
At what value would the minimum wage have to be set so that the firm would make zero economic profit from employing an additional low-skilled worker to clear woodland?
Complete the following labor supply table for a firm hiring labor competitively: LO17.2
Show graphically the labor supply and marginal resource (labor) cost curves for this firm. Are the curves the same or different? If they are different, which one is higher?
Plot the labor demand data of review question 2 in Chapter 16 on the graph used in part a above. What are the equilibrium wage rate and level of employment?
Chapter 17 Solutions
Microeconomics
Ch. 17.3 - Prob. 1QQCh. 17.3 - Prob. 2QQCh. 17.3 - Prob. 3QQCh. 17.3 - Prob. 4QQCh. 17.A - Prob. 1ADQCh. 17.A - Prob. 2ADQCh. 17.A - Prob. 3ADQCh. 17.A - Prob. 4ADQCh. 17.A - Prob. 1ARQCh. 17.A - Prob. 2ARQ
Ch. 17.A - Prob. 3ARQCh. 17.A - Prob. 4ARQCh. 17.A - Prob. 1APCh. 17.A - Prob. 2APCh. 17 - Prob. 1DQCh. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQCh. 17 - Prob. 6DQCh. 17 - Prob. 7DQCh. 17 - Prob. 8DQCh. 17 - Prob. 9DQCh. 17 - Prob. 10DQCh. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 1PCh. 17 - Prob. 2PCh. 17 - Prob. 3PCh. 17 - Prob. 4PCh. 17 - Prob. 5P
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- Figure 3.2 Si 15 S2 10 5. D2 Di 20 30 40 Quantity of Labor In Figure 3.2, assume that we have labor market demand and supply curves of D2 and S1, respectively. What is the equilibrium wage and employment level? O $15; 30 workers O 5; 30 workers $5; 20 workers O $10; 40 workers Wage Rate ($ per day)arrow_forward5 MC Qu. 16-35 (Algo) Refer to the given table.... Employment 0 1 2 3 4 S 6 Multiple Choice O O Total Product 0 Refer to the given table. If the firm is hiring workers under purely competitive conditions at a wage rate of $38, it will employ O O 12 22 30 36 40 42 Tworker 2 workers. 3 workers Product Price $5 Sworkers 5 5 5 5 5 5 0arrow_forwardWhich of the following is a method used by unions to increase the demand for their members' labor? O A. Decrease the marginal product of union members. O B. Oppose minimum wage laws. OC. Oppose immigration restrictions. O D. Support import restrictions. O E. Increase imported goods and servicesarrow_forward
- Which of the following will occur if labour unions successfully negotiate wage increases for its members? O The relative wages in nonunion sectors decrease. Employment likely increases in the union sector, Employment likely decreases in the nonunion sector. The relative wages of nonunion workers also increase.arrow_forward4. Inclusive, or industrial, unions - Negotiating a higher industry 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 $9 to $12 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. 18 15 Demand 12 Supply Supply Demand 3 10 15 20 25 30 QUANTITY OF LABOR ---- --- Co WAGE RATEarrow_forwardIn 2020 in the United States, only about 10.8% of all workers belonged to a labor union. If union membership among workers increased to about 30% (roughly where it was in the 1950s in the US), what effect would we expect this to have? less bargaining power for workers O lower profit share of total income increased income inequality O increased racial and ethnic inequalityarrow_forward
- # of Workers 1 2 3 4 5 6 Output 3 8 16 21 23 24 MPP MPP: marginal physical product MRP: marginal revenue product MRParrow_forwardFigure Al Wage MC $30 $23 $16 $12 8. 11 13 Labor Refer to Figure A1. What is the wage set by the monopsonistic employer and how many people do they hire? O $12 and 8 employees. O $16 and 11 employees. O $12 and 13 employees. O $23 and 8 employees.arrow_forward10 What wage would the union choose if it behaved as a `monopoly union"? What amount of employment would the firm choose in response? Is this outcome on the contract curve? 8 7 Answer: 6 По 5 4 TT Submit Answer 3 2 TT2 1 MRPL 1 3 6 7 8 9. 10 Name an outcome which is a Pareto improvement over the monopoly union outcome. Name an outcome which is Pareto efficient. Answer: If the alternative wage is $3, is this union maximizing the wage bill or economic rent? Answer: Submit Answer Submit Answer Suppose the alternative wage is $7 and the firm and union bargain within a right-to-manage framework. Is the union's preferred outcome within the bargaining range? Answer: Submit Answerarrow_forward
- . Suppose that a car dealership wishes to see if efficiency wages will help improve its salespeople’s productivity. Currently, each salesperson sells an average of one car per day while being paid $20 per hour for an eight-hour day. LO17.8 What is the current labor cost per car sold? Suppose that when the dealer raises the price of labor to $30 per hour the average number of cars sold by a salesperson increases to two per day. What is now the labor cost per car sold? By how much is it higher or lower than it was before? Has the efficiency of labor expenditures by the firm (cars sold per dollar of wages paid to salespeople) increased or decreased? Suppose that if the wage is raised a second time to $40 per hour the number of cars sold rises to an average of 2.5 per day. What is now the labor cost per car sold? If the firm’s goal is to maximize the efficiency of its labor expenditures, which of the three hourly salary rates should it use: $20 per hour, $30 per hour, or $40 per hour?…arrow_forwardWage Kal 0 2 Multiple Choice O O 3 Quantity of Workers 3 2 6 4 5 S3 4 Refer to the graph, which shows the supply and demand for unionized manufacturing workers. The initial equilibrium point is point 1. The wages paid in comparable nonunion occupations Increase significantly, while at the same time the price of manufactured goods decreases. Which point would represent the new equilibrium? 51 D3 D₁ 52 D2arrow_forwardQuestion 36 Table 28-3 Civilian labor force Persons unemployed 15 weeks or longer Job losers and persons who have completed temporary jobs (excludes job leavers) Total unemployed Total unemployed plus discouraged workers Total unemployed plus all marginally attached workers Total mployed plu all marginally attached workers plus total employed part-time for economic reasons Refer to Table 28-3. What is the U-2 measure of labor underutilization? a. 1.5% O b. 3.1% O c. 6.2% O d. 4.7% 100 million 1.6 million 3.1 million 6.2 million 7.0 million 8.1 million 9.2 millionarrow_forward
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