Consider a company operating in a competitive market. The company sells units of output and receives a price of $30 per unit, and pays a daily market wage of $285 to each worker it employs. In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers. Labor Output Marginal Product of Labor (Number of workers) (Units of output) (Units of output) Value of the Marginal Product of Labor (Dollars) WAGE (Dollars per worker) 500 450 400 350 On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to sh the wage rate. (Note: If you cannot place the wage rate at the level you want, move the two end points individually.) 300 Hint: Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the value o the marginal product for the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments w automatically connect the points. 250 200 150 100 50 0 0 1 2 0 3 4 5 1 0 16 31 45 56 64 16 15 14 11 LABOR (Number of workers) 00 The profit-maximizing quantity of labor at the market wage is 8 Demand Market Wage Rate

Question 1.34: Marginal product of labor Country Z has perfectly competitive markets in which labor and all goods clear. A firm produces bread using raw material (flour), workers (bakers), and capital (ovens). A worker produces 29 loaves of bread each hour. Each loaf of bread sells for 3.47. ● ● The firm uses flour costing 1.53 for each loaf of bread. No bread remains unsold each day, and consumers can buy all the bread they want. The price level is 1.39. The nominal wage rate is 56.62 an hour. ● Firms earn an accounting profit of 2.20 on each loaf of bread. What is the marginal product of labor (in real terms) for bakers? A. 40.73 an hour B. 45.90 an hour C. 63.80 an hour D. 72.40 an hour E. 100.63 an hour Question 1.35: Real interest rate Which of the following causes the current real interest rate to decrease? A. A permanent decrease in government spending B. A temporary decrease in government spending C. Central bank purchases of bonds in the open market D. Central bank sales of…

The table below shows levels of employment (Labor), the marginal product at each of those levels, and the price at which the firm can sell output in a perfectly competitive market. Labor Marginal Product of Labor Price of the Product Value of the Marginal Product 1 7 $3 6 $3 3 $3 4 4 $3 3 $3 a) Complete the table finding the Value of the Marginal Product (show your work!). b) If the wage rate is $15, what is the firm's profit maximizing level of employment? JUSTIFY your answer! 2.

Labor(workers per day) Total product (units per day) Marginal product Average product 0 0 0 0 1 2 2 2 2 8 ​ ​ 3 12 ​ ​ 4 15 ​ ​ 5 16 1 ​ In the above table, the marginal product is greatest when the   fourth worker is hired.   first worker is hired.   third worker is hired.   second worker is hired.

In the short run, the owner of a firm should continue to hire additional units of labor until: a. the price of the product is equal to the wage rate divided by the marginal product of labor. b. the wage rate is equal to the price of the product multiplied by the marginal product of labor. c. the marginal product of labor is equal to the wage rate divided by the product price. d. Both a and c are correct. e. All of the above are correct.

Ab 9  Economics

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