Ch 28-33
A profit-maximizing monopolist hires workers in a perfectly competitive labor market. Employing the last worker increased the firm's total weekly output from 110 units to 111 units and caused the firm's weekly revenues to rise from $25,250 to $25,875 . What is the current prevailing weekly wage rate in the labor market?
$625
The following table shows the relationship between workers and output for a small factory in the short run, with capital held constant. The price of the firm's output is $5 . Find the marginal physical product of labor (MPPL) and the marginal revenue product (MRPL).
*MRPL= (MR x MPPL)* Formulae used MPPL = TPPN - TPPN-1 MRPL = PRICE X MPPL MRPL = Labor Input x MPPL The following table shows the relationship between workers and output for a small factory in the short run, with capital held constant. The price of the firm's output is $5 . Find the marginal physical product of labor (MPPL ) and the marginal revenue product *(MRPL ). ($5 * MPPL)* MPPL = Count backwards 34-20 =14
The table above gives some data from the production function of a firm that is a perfect competitor in both the product and labor markets. The wage rate in the industry is $300 and the price of the good produced is $15 . The profit-maximizing quantity of labor to hire is
103 workers
Consider a purely competitive firm's demand for and supply of labor as shown in the diagram on the right. Initially, the equilibrium wage rate is $10. Suppose a new union is formed that limits the size of its membership to the workforce employed at that time. Suppose then that the demand for labor increases to D2.
After this change, the wage rate will increase and employment will be unchanged .
Right-to-work laws in individual states
All of the above.
A country's current account balance is $4365 . Assuming that there is no government intervention, this means that this country has a current account surplus and a financial account deficit . Part 2 This means that this country is exporting more goods than it is importing and that it is importing money or money equivalents .
Assuming that there is no government intervention, this means that this country has a current account surplus and a financial account deficit . Part 2 This means that this country is exporting more goods than it is importing and that it is importing money or money equivalents .
All other things held constant, if the wage rate increases and all firms want to hire fewer workers , each firm's marginal revenue product curve will
B.increase because as industry output falls, the price of the firm's output will rise. Thus, the industry demand for labor in a perfectly competitive industry is not equal to the horizontal summation of the individual firm demand curves.
Top and mid-level managers of Japanese firms with U.S. offices and plants must travel to the United States several times each month. Most Japanese firms previously employed their own travel staffs to arrange these trips, but increasingly they have been outsourcing this work to U.S. travel agents. Suppose this trend becomes widespread. Part 2 First, using the diagram to the right for the United States, show what will happen in the labor market for U.S. workers who provide travel services.
Consequently, wages and employment for travel agents in the U.S. will increase . Wages and employment for travel agents in Japan will decrease
Consider a perfectly competitive firm's marginal revenue product of labor curve shown in the diagram.
For the perfectly competitive firm, the marginal revenue product is B. marginal physical product times the product price.
The following table shows the relationship between the quantity of workers supplied and the wage rate for a monopsonist. Find the total wage bill and the marginal factor cost (MFC).
If the price of the firm's output is $1 and the marginal physical product of labor is constant at 14 , this firm will hire 3 workers at a wage of $12 .
On Wednesday, the exchange rate between the Japanese yen and the U.S. dollar was $0.0120 per yen. On Thursday, it was $0.0145 per yen.
It can be concluded that the U.S. dollar has depreciated relative to the yen.
Which of the following strategies would be likely to increase wages over time by restricting the supply of union labor?
Limiting membership to the size of the current workforce
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).
MPPL x MR = MRPL
The current market wage rate is $10 , the rental rate of land is $100 per unit, and the rental rate of capital is $500 . Production managers at the firm find that under their current allocation of factors of production, the marginal revenue product of labor is $100 , the marginal revenue product of land is $1 comma 000 , and the marginal revenue product of capital is $1 comma 500 . Is the firm maximizing profit?
No. The marginal revenue product per dollar spent on each input is not equal
Recently, there has been an increase in the market demand for products of firms in manufacturing industries. The production of many of these products requires the skills of welders. Because welding is a dirty and dangerous job compared with other occupations, in recent years fewer people have sought employment as welders.
S2 shifts up to the left E2 shifts up D1
Suppose that the MRP 1 curve in the figure to the right is drawn under the assumption the product price is $5 per unit. If the market clearing product price rises to $7 per unit, which way does the MRP curve shift? Why?
Since marginal revenue product is constant along the MRP 1 curve and equals the marginal product times the product price, a rise in the product price to $7 per unit causes the MRP curve to shift up (or right) to MRP 2
The following table depicts the output of a firm that manufactures computer printers. The printers sell for $100 each.
Suppose that there is an increase in the demand for personal computer systems. This will increase the marginal revenue product of labor, increase the number of workers hired by the firm, and increase the marginal factor cost of labor.
Which of the following is not a key factor that influences the elasticity of demand for labor?
The availability of labor in the market.
Explain the impact of each of the following events on the market for union labor. a. Union-produced TV and radio commercials convince consumers to buy domestically manufactured clothing instead of imported clothing.
The demand for union workers will rise, increasing union wages and employment.
b. The union sponsors periodic training programs that instruct union laborers about the most efficient use of machinery and tools.
The demand for union workers will rise, increasing union wages and employment.
Currently, the wage rate is $5 per worker hour, and the price of capital is $10 per machine hour. If the marginal productivity of labor is 6 units per hour and the marginal productivity of capital is 8 units per hour, how should a cost-minimizing firm adjust its input mix, assuming that it does not want to increase output?
The firm should decrease its use of capital and increase its use of labor.
If foreign firms outsource jobs to U.S. markets comma The net effect of outsourcing on U.S. markets
U.S. employment and wages will rise May increase or decrease US wages and employment
The Overnight Construction Company has just signed a collective bargaining contract in which it agrees that all workers it hires must be union members in good standing at the time they are hired.
a closed shop.
A single firm is the only employer in a labor market. The marginal revenue product, labor supply, and marginal factor cost curves that it faces are displayed in the diagram at the right. Use this information to answer the following questions.
a. How many units of labor will this firm employ in order to maximize its economic profits? 1000 units. (Enter a numeric response using an integer.) Part 3 b. What hourly wage rate will this firm pay its workers? $10 . Part 4 c. What is the total amount of wage payments that this firm will make to its workers each hour? $10000 .
Explain how the following events would affect the demand for labor. a. A new education program administered by the company increases labor's marginal product. The demand for labor would increase . b. The firm completes a new plant with a larger workspace and new machinery that workers can utilize and that does not substitute for the functions provided by workers' labor. The demand for labor would increase .
a. increase b. increase
Explain what happens to the elasticity of demand for labor in a given industry after each of the following events. a. A new manufacturing technique makes capital easier to substitute for labor. The elasticity of demand for labor becomes more elastic . b. There is an increase in the number of substitutes for the final product that labor produces. The elasticity of demand for labor becomes more elastic . c. After a drop in the prices of capital inputs, labor accounts for a larger portion of a firm's factor costs. The elasticity of demand for labor becomes more elastic .
a. more elastic b. more elastic c. more elastic
A monopolist will employ ________ workers than a perfectly competitive industry because for a monopolist, marginal revenue is _____ price.
fewer ; less than
Which of the following is not a correct statement about the economic effects of labor unions?
in recent years, unions have succeeded
The price elasticity of demand for an input
is larger the longer the time period being considered.
A government may seek to limit the power of a union because
labor strikes, especially those affecting several industries, have an adverse effect on the economy.
The monopolist's MRP curve will always be
less elastic than it would be for a perfectly competitive firm in the product market because the product price falls for a monopoly.
The market demand curve for labor is
less elastic than the horizontal summation of the individual firms' demand curves because output price changes as total output changes.
In order to raise wages above the market level for its workers, a union must
limit the supply of labor in an industry.
The Taft-Hartley Act of 1947 (the Labor Management Relations Act)
made certain union practices such as closed-shops illegal.
right-to-work laws
made it illegal to require union membership as a condition of employment
Suppose that the objective of a union is to maximize the total dues paid to the union by its membership. If union dues are paid as a flat amount per union member employed, the union's strategy will be to
negotiate for the maximum wage rate the employer is willing to pay for the number of workers belonging to the union.
Suppose that the objective of a union is to maximize the total dues paid to the union by its membership. Now, consider the case where union dues are a percentage of total earnings of the union membership. Then the union's strategy will be to
negotiate for the wage level that is consistent with unit elastic demand for labor.
Monopsonistic exploitation is
the difference between the marginal revenue product of labor and the wage paid by the monopsonist.
To economists, the social cost of unions depends primarily on
the extent to which they reduce employment by raising wages.
Currently in the United States,
the largest unions primarily represent service industries and government.
The elasticity of demand for labor will be less elastic when
the less elastic the demand for the final product
Which of the following is not a correct statement about the distribution of income and wealth in the United States?
the share of total income received has not changed significantly since ww2
The average annual earnings of non-unionized workers may exceed those of unionized workers even though unionized workers' hourly wages are more than $2 higher, since non-unionized workers
typically work longer hours, so their total earnings exceed those of unionized workers.
A firm that requires a person after being hired to become a union member is known as a(n)
union shop.
The weekly wage paid by computer printer manufacturers in a perfectly competitive market is $nbsp 600 . Using the information provided in the table above, how many workers will the profit-maximizing employer hire? 14 workers. (Enter a numeric response using an integer.)
weekly wage = MRP
