1. Draw a diagram that illustrates the set of efficient contracts. Be sure your diagram also includes: at least 2 firm isoprofit curves; at least 2 union indifference curves; the labour demand curve 2. Now describe the location of the contract curve relative to the labour demand curve and the isoprofit curves and explain the

1. Draw a diagram that illustrates the set of efficient contracts. Be sure your diagram also includes: at least 2 firm isoprofit curves; at least 2 union indifference curves; the labour demand curve 2. Now describe the location of the contract curve relative to the labour demand curve and the isoprofit curves and explain the

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter19: Labor And Entrepreneurship: The Human Inputs

Section: Chapter Questions

Problem 1DQ

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The diagram provides supply and demand curves for a competitive labour market it a labour union negobates the wage to W, in an otherwise competitive labour market OA employers will hire L, labour OB. employers will here labour at the level higher than L OC. the supply of labour will stay the same OD equilibrium will occur at W, and L OE the demand for labour will stay the same 0 Wage Rate W₁ Quarnty of Labour Supply Demand
Given the labor demand function (9)-/+cq where I(9) is labor demanded, is the fixed cost of production and cis the constant marginal cost. Assume weg wf, • Derive p by maximizing profit. . If you are given that we are following Dixit Stiglitz's demand system how would you comment upon the economy of scope and the vanety produced?
Suppose a firm produces cables for video games using workers according to the table below and that its output sells for $1.00 per unit. 40- 38 36- 34 32 30- TITT Marginal Marginal Workers Output Product Revenue Product 28 26- 24 22- 20- 18 16 14 12 10 1 15 15 15 2 27 12 12 3 36 9. 9 4 42 6 6 5 45 Derive the firm's labor demand curve. Use the line drawing tool to draw the firm's labor demand curve. Label this line 'Demand". 2- Carefully follow the instructions above, and only draw the required objects. Quantity of labor Wage
See Diagram 2. if Firm Y's equilibrium point is J, which is total wage bill? (A) OAHK (B) OBJK (C) OGHK (D) OWOJK Diagram2: Perfect competitive labour market A Wage B G Wo K H SL DL= VMPE DL= MRPE E
Suppose the union’s resistance curve is summarized by the following data. The union’s initial wage demand is $10 per hour. If a strike occurs, the wage demands change as follows:Length of Strike: Hourly Wage Demanded1 month $92 months 83 months 74 months 65 or more months 5Consider the following changes to the union resistance curve and state whether the proposed change makes a strike more likely to occur, and whether, if a strike occurs, it is a longer strike.a. The drop in the wage demand from $10 to $5 per hour occurs within the span of two months, as opposed to five months.b. The union is willing to moderate its wage demands further after the strike has lasted for six months. In particular, the wage demand keeps dropping to $4 in the sixth…
2 of 2 Book Print erences ic raw ill 430s workers S 10 20 30 40 5:07 / 5:07 The following table gives output for different numbers of workers for Shiny Sleeves, a producer of shirt varnish. Shiny Sleeve's wages are $10 per hour. For each level of workers, calculate Shiny Sleeve's total hourly wage cost. Instructions: Enter Marginal Product and Wage Cost in whole numbers and Marginal Cost rounded to two decimal places. For each jump between levels of workers and output, calculate Shiny Sleeve's Marginal Product and Marginal Cost. output/hour 50 100 140 170 Marginal Product LO 5 4 3 1x
1. Why is a firm's demand for labor considered a 'derived demand?' What is it derived from? 2. The marginal cost of labor (MCL) is equal to what for a firm that operates in a competitive labor market? How does this compare with the MCL for a monopsony.
Suppose the supply of soccer players is give by the the equation Ls=W/10 and the valu of the marginal product is given by VMPL=100,000 - 100LD. Question 1 Compute the equilibrium number of players hired in a competitive labor market. Round to the nearest whole number. Question 2 Compute the equilibrium the wage paid to each player in a competitive labor market. Round to the nearest dollar.
23. Question 23 is based on the below-mentioned diagram illustrates a monopsony outcome. The monopsony firm MRP = marginal revenue product, MFC = marginal factor cost and the wage is determined by the labour supply curve at this level of output. In the absence of a union the monopsony firm hires Lm workers and pays them Wm. MFC wage Wu Wm Lm S O a. hire less than Lm workers. Ob. hire a maximum of Lm workers. Ochire greater than Lm workers. Od. None of the above. MRP Quantity of labor Suppose the union and firm negotiates a wage above Wu, the firm will A
Consider a manufacturing firm in a labor market that isperfectly competitive. There are two kinds of workers: productiveworkers whose marginal revenue product is $48,000 per year, andlazy workers whose marginal revenue product is $40,000 per year. Itis difficult for the firm to differentiate between productive andlazy workers. A local college offers a new yearlong astronomy course. Althoughthe cost of tuition is the same for both types of workers, thepsychic cost of having to work hard and get a passing grade islower for productive workers because they are able to learn morequickly than lazy workers. Therefore, the cost of taking the class(including the cost of tuition as well as the psychic cost) is$5,000 per year for a productive worker and $10,000 per year for alazy worker. Because astronomy has little relevance tomanufacturing, taking the class does not increase or decrease aworker's productivity. The firm uses the class as a way to differentiate betweenproductive and lazy…
The demand for unionized labor will generally be more elastic, and it will be more difficult for the union to achieve above-equilibrium wages, when: O there are few close substitutes for the unionized workers. O trade barriers limit the importation of the product produced by the unionized workers. O the cost of employing the unionized workers is a small part of the total cost of product that they produce. the demand for the product produced by the unionized workers is relatively price elastic. A strike, or the threat of one, is most likely to be effective when: O demand for the firm's product is weak. O foreign competition for the product is high. O the firm has a low product inventory. O demand for the product produced by the union workers is highly elastic.
2. If a worker's wage decreases, the substitution effect says their choice of leisure will while the income effect says it will a. Increase, decrease b. Decrease, increase c. Increase, increase d. Decrease, decrease 3. For a profit-maximizing monopsonist (only person hiring), they will hire labor until the MCE-MRPE. Cortult the following table which I have started to fill out. What is the optimal number of workers for this firm to hire if their product sells for $15. Workers Wage MCE 0 3 0 1 N345 2 1234 a. b. 2 Cool d. 4 9 21 30 39 3 15 100 ** Product/hour Revenue MPE N/A 5 4 0 5 9 12 14 15 $0 $75 $135 TE D F Focus MRPE N/A 75 60 LILLE REE -