Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 17, Problem 1RQ
To determine
The reason for higher level of wage in the developed country.
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Q26
Assume that Paul Bocuse's restaurant in Lyon is hiring labour in an amount such that the MRC of the last worker is $10 and his MRP is $15. On the basis of this information, we can say that
Multiple Choice
profits will be increased by hiring additional workers.
the Paul Bocuse restaurant is maximizing profits.
the Paul Bocuse restaurant is minimizing losses.
profits will be increased by hiring fewer workers.
marginal revenue product must exceed average revenue product.
Ian works at an iron smelter in Pittsburgh, the center of iron
production in America. Due to the difficulty in measuring
the productivity of individual employees, Ian's employer as
well as the other iron smelters all pay an efficiency wage.
Adjust the wage line on the graph to reflect this situation.
What characteristic of efficiency-wage jobs is not
supported by the situation shown in the graph?
The wage rate will eventually return to the
market-clearing level.
Efficiency wages result in an increase in the rate
of unemployment.
Elevated wages serve as an economic incentive to
work harder.
Efficiency wage jobs result in a surplus of workers at
the wage being offered.
Wage ($ per hour)
Wage
Quantity of workers (in thousands)
S
O
A craft chocolate producer considers hiring one extra worker in production. Currently, the shop is selling 200 chocolate bars per day at a price of $6. With one extra worker, the manager estimates that they would be able to increase the output to 250 chocolate bars per day and that they would need to lower the price to $5.50 in order to sell them. The daily salary of this new employee would be the same as for the existing ones: $150. What should the manager do?
Group of answer choices
Reduce the number of workers working in his chocolate place
Increase its selling price
Turn down the new worker and maintain the same number of employees
Increase the salary of all employees
Hire the extra worker
Chapter 17 Solutions
Economics (Irwin Economics)
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. 5ADQCh. 17.A - Prob. 1ARQ
Ch. 17.A - Prob. 2ARQCh. 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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- 1. The demand for labor Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley's production schedule for strawberries is given in the following table: Labor Input Total Output (Number of workers) (Pounds of strawberries) 0 WAGE RATE (Dollars per worker) 300 Suppose that the market wage for strawberry pickers is $170 per worker per day, and the price of strawberries is $12 per pound. 270 On the following graph, use the blue points (circle symbol) to plot Live Happley's labor demand curve when the output price is $12 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the marginal revenue product of the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically connect the points. 240 210 180 150 120 90 60 30 1 0 2 3 4 5 0 0 18 34 48 60 70…arrow_forwardAccording to the Wall Street Journal, Mitsubishi Motors recently announced a major restructuring plan in an attempt to reverse declining global sales. Suppose that as part of the restructuring planMitsubishi conducts an analysis of how labour and capital are used in its production process. Prior to restructuring Mitsubishi’s marginal rate of technical substitution is 0.15 ( in absolute value). To hire workers. Suppose that Mitsubishi must pay the competitive hourly wage of US$ 15. In thestudy of production process and markets where capital is procured, suppose that Mitsubishi determine that its marginal productivity of capital is 0.5 small cars per hour at its new targeted level of output and that capital is procured in a highly competitive market. The same study indicates that the average selling price of Mitsubishi’s smallest car is US$ 9500. Determine the rate at which Mitsubishi can rent capital and marginal productivity of labour at its new targeted level of output. To minimize…arrow_forwardAcme Inc. supplies rocket ships to the retail market and hires workers to assemble the components. A rocket ship sells for $30,000, and Acme can buy the components for each rocket ship for $27,000. Wiley and Sam are two workers for Acme. Sam can assemble 1/5 of a rocket ship per month and Wiley can assemble 1/10. If the labor market is perfectly competitive and rocket components are Acme’s only other cost, how much will Sam and Wiley be paid? Instructions: Enter your responses as whole numbers. Sam will be paid $_____ per month Wiley will be paid $______ per montharrow_forward
- Mary's employer is considering her for a firm-specific training program that will cost $4 per hour. Her current marginal revenue product is $20 per hour and will rise to $25 upon completion of the program. Of the following, Mary's training and posttraining wage, respectively, will most likely be O $20 and $25 O $16 and $25 O $20 and $ $21 O $16 and $21arrow_forwardAccording to the Economics Policy Institute (Mishel and Wolfe, 2019) CEO pay has grown 940% since 1978 while the compensation of the average worker has only risen 12%. While you can easily find sources that provide statistics that conflict with these numbers, you would be hard pressed to find any credible source that refutes the idea that the rate of pay of CEO’s and other upper-level managers has not dramatically increased relative to an organization’s lower-level employees in just about any 10 or more year period over the past 60 years. In the world of Adam Smith, the “invisible hand” of the free market capitalistic model would address inequities/out of balances. Are the forces represented by the “invisible hand” working? Why or why not? Is there an ethical dimension to the discussion of upper-level manager compensation? Why or why not? How does (or does it?) levels of pay of upper management impact the rest of us commoners?arrow_forwardTim works 51 hours per week, and his wage is $20 per hour. If his wage increases to $40 per hour, and his labor supply curve is downward-sloping, this means:arrow_forward
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