A firm sells bagels for £0.51 each. With 6 workers the firm produces 42 dozen per hour, and with 7 workers it produces 53 dozen per hour. (a) To within two decimal places, the marginal revenue product of labor is £ . (b) Assume an 8-hour shift per worker and the labour market is perfectly competitive. To within two decimal places, the market hourly wage rate is £ .

A firm sells bagels for £0.51 each. With 6 workers the firm produces 42 dozen per hour, and with 7 workers it produces 53 dozen per hour. (a) To within two decimal places, the marginal revenue product of labor is £ . (b) Assume an 8-hour shift per worker and the labour market is perfectly competitive. To within two decimal places, the market hourly wage rate is £ .

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter11: Labor Markets

Section: Chapter Questions

Problem 1SQ

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(a) Why does the labour demand curve slope downwards? (b) A garment factory’s production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 2 36 3 48 4 56 5 60 6 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory’s brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above. Question 4 Using your knowledge and understanding of supply and demand analysis to graph the following and explain your graph: (a) an increase in labour productivity. (b) an increase in preference for work. (c) the trade union withdraws labour through a strike.
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Suppose that a shoe manufacturer that employs 6 workers is able to increase the average product of labour from 5 pairs of shoes to 6 pairs of shoes per hour by hiring a seventh worker. The seventh worker's hourly marginal product is?
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