16.1The Demand for Labor
State whether each of the following events will result in a movement along the market demand curve for labor in electronics factories in China or whether it will cause the market demand curve for labor to shift. If the demand curve shifts, indicate whether it will shift to the left or to the right in the provided graph.
A decline in the wage rate will result in a -- movement along -- the labor demand curve A -increase- in the price of smartphones will result in a -shift in- the labor demand curve Several firms-exiting- the smartphone market in China will result in a -shift in- the labor demand curve. Chinese high schools introduce new vocational courses in assembling electronic products will result in a -shift in- the labor demand curve.
What happens as a firm increases the number of workers that it hires? Let MRP equal the marginal revenue product of labor and W equal the wage rate. When should a firm hire more workers to increase profit?
Both the marginal product of labor and the marginal revenue product of labor decrease. When MRP > W
The market demand curve for labor is determined by adding up the wages for each worker at each quantity of labor demanded, holding constant all other variables that might affect the willingness of firms to hire workers.
False
Marginal product of labor
Formula = (y1-y0)/(L1-L0) Y=quantity,L=Labor
From the information in the table, can you determine whether this firm is a price taker or a price maker? Briefly explain.
The firm is a price taker in the market for television sets and in the market for labor because it cannot affect the price of televisions or the wage.
What is the difference between the marginal product of labor and the marginal revenue product of labor for a firm in a perfectly competitive market?
The marginal revenue product of labor is equal to the marginal product of labor multiplied by the product price.
a. What does the restaurant owner mean by saying that a $20 hamburger "wouldn't make sense"? b. From the information given, what can we conclude about the marginal revenue product of the servers in these restaurants relative to the compensation--wage plus health insurance plus paid sick and parental leave--they would receive? c. Who gains and who loses from the city regulations, as described in this news article, that set the wages and other compensation firms in San Francisco are required to pay?
The owner meant that he would have difficulty selling the hamburgers at a price of $20. The servers' marginal revenue product was --less than-- the compensation they would receive. Restaurant workers who are able to keep their jobs Gain Business owners Lose Low-skill workers, such as dishwashers Lose Customers Lose
Which of the factors listed below does not cause the demand curve for labor to shift? As the wage increases,
a change in the wage the demand for labor curve does not shift, but the quantity demanded of labor decreases.
The demand for labor is called a derived demand, because
demand for labor is derived from the firm's output choice.
Why is the demand curve for labor downward sloping? The demand curve is downward sloping
due to the law of diminishing returns.
How could a baseball player have negative value to a baseball team? Jason Hayward would have negative value to the Chicago Cubs if
his salary is greater than his marginal revenue product.
What are the five most important variables that cause the market demand curve for labor to shift? The demand curve for labor shifts with changes in
human capital, technology, the price of the product, the quantity of other inputs, and the number of firms in the market.
Frank Gunter owns an apple orchard. He employs 32 apple pickers and pays them $ 9 per hour to pick apples, which he sells for $ 1.50 per box. If Frank is maximizing profits, what is the marginal revenue product of the last worker he hired? What is that worker's marginal product?
marginal revenue product = workers paid = $9 worker's marginal product = MRP = Price * MP = $6