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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Chapter 17.A, Problem 2ARQ
To determine
The basic areas covered in work agreement.
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. 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?…
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…
Which statement is false regarding unions?
O a) With unions successfully raising wages for workers, it can also reduce overall
employment.
b) When unions drive up wages for workers, it results in an incentive for firms to
hire more workers.
OC) Unions drive up wages and benefits for workers by asserting market power
over employers.
O d) It is possible that raising wages for union workers can lead to higher
productivity than nonunion workers because union workers are more likely to
stay on the job longer.
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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- 5 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_forwardEmployment 0 1 2 3 4 5 6 O 4-5 workers. 3-4 workers. Product O 0-1 workers. O 5-6 workers. 0 6 11 15 18 20 21 Price 5 5 5 5 5 5 On the basis of the information in the table above, if the firm is hiring workers under purely competitive conditions at a wage rate of $10, it will choose to employ between: 5 Revenue MRParrow_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_forward
- Number of Employees Total Production Marginal Product of Labor Marginal Revenue Product O 1 2 3 4 O Four employees O One employees O Three employees O OTwo employees 9 24 36 43 O 9 If the price of the item is $15.00 per unit and the employees cost $125 each, how many employees should the firm hire to maximize their profit? 15 12 7arrow_forwardYou said that "this may result in a steeper AS curve due to the fact that firms can produce more output for a given price level.". However, I think that steeper AS without the change of y-intercept(shift) will have opposite effect. I drew a diagram to compare different As curves with same y intercept and different slopes. It is clear that for same level; of price level, steeper AS has loer output (Y2) than faltter AS (Y1), could u please explain it for me? Thanks a lot :)arrow_forwardConsider a small landscaping company run by Mr. Viemeister. He is considering increasing his firm’s capacity. If he adds one more worker, the firm’s total monthly revenue will increase from $50,000 to $58,000. If he adds one more tractor, monthly revenue will increase from $50,000 to $62,000. Each additional worker costs $4,000 per month, while an additional tractor would also cost $4,000 per month. LO16.5 a. What is the marginal product of labor? The marginal product of capital? b. What is the ratio of the marginal product of labor to the price of labor (MPL/PL)? What is the ratio of the marginal product of capital to the price of capital (MPK/PK)? c. Is the firm using the least-costly combination of inputs? d. Does adding an additional worker or adding an additional tractor yield a larger increase in total revenue for each dollar spent?arrow_forward
- Figure 13.5 Wage (S) 200- 180- 160- 140- 120- 100 80 60- 40 20 0 MR 10 20 30 40 50 60 70 80 Quantity of labor Reference: Ref 13-7 MC (Figure 13.5) The figure represents a labor union with wage in dollars and quantity of labor in hundreds of hours. If the labor union chooses to maximize total wages, how many workers will it supply? Select one: O A. 4,000 OB. 2,750 O C. 5,000 D. 8,000arrow_forwardSuppose that marginal product doubled while product price tripled in the table belo Marginal Marginal Product (MP) Units of Total Product Product Price | Total Revenue Revenue Resource (Output) Product $2 $0 1 7 7 2 14 $14 2 13 6. 2 26 12 3 18 2 36 10 4 22 2 44 8 25 50 6 27 2 2 54 4 7 28 1 56 LOarrow_forwardThe table below shows your production function relating output per number of hired workers (assume no changes to the capital and size of the convenient store. Use the given information to find the Marginal Product of Labor. Workers Total Output 0 0 1 2 3 4 LO 5 90 149 182 197 202 Marginal Product A OHire a number of workers where marginal product is positive OHire a number of workers where marginal product is negative OHire the number of workers where marginal product is maximized — ← What should determine the number of workers to hire if your goal is to maximize efficiency? OHire as many employees as possible OHire the minimum number of workersarrow_forward
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