Edison is a stay-at-home parent who lives in Chicago and provides math tutoring for extra cash. At a wage of $35 per hour, he is willing to tutor 10 hours per week. At $60 per hour, he is willing to tutor 19 hours per week. Using the midpoints formula, the elasticity of Edison's labor supply between the wages of $35 and $60 per hour is approximately means that Edison's supply of labor within this wage range is which

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Consider the fast food industry in the United States. Research existing estimates of the demand for fast food, the labor share for fast food, and the elasticity of substitution between capital and labor in the fast food industry. Based on the estimates in the literature, what is a plausible range of values for the elasticity of labor demand for the fast food industry? Thanks!

Consider a third pricing scheme that the union in Solved Problem 12.2 might use. It sets a wage, , and lets the firms hire as many workers as they want (that is, the union does not set a minimum number of hours), but requires a lump-sum contribution to each worker’s retirement fund. What is such a pricing scheme called? Can the union achieve the same outcome as it would if it perfectly price discriminated? (Hint: It could set the wage where the supply curve hits the demand curve.) Does your answer depend on whether the union workers are identical? Solved Problem 12.2 Competitive firms are the customers of a union, which is the monopoly supplier of labor services. Show the union’s “producer surplus” if it perfectly price discriminates. Then suppose that the union makes the firms a take-it-or-leave-it offer: They must guarantee to hire a minimum of hours of work at a wage of , or they can hire no one. Show that by setting  appropriately, the union can…

Determine whether there is a specific market price above which demand is zero or price per unit is unbounded. Write the maximum possible market price, using dollars per unit as the units of measure for input. (If the price per unit is unbounded, enter UNBOUNDED.) D(p) = 3.6p-0 -0.3 p = units dollars per unit

Leisure Times, Inc., employs skilled workers and capital to install hot tubs. The capital includes the tools and equipment workers use to construct and install the tubs. The installation services are sold in a competitive market for $1,000 per hot tub. Leisure Times is able to hire workers for $3,500 per month, including the cost of wages, fringe benefits, and employment taxes. The increase in the number of hot tubs installed as additional workers are hired is indicated in the following table. Complete the third and fourth columns of the table by computing the marginal product as the number of employed workers changes and the marginal revenue product for each unit of labor when the competitive price for a hot tub is $1,000. Number of Workers Employed 1 2 3 4 10 5 6 7 8 9 Number of Hot Tubs Installed 5 12 At this new wage, the firm should hire 18 23 27 30 32 33 34 Marginal Product If Leisure Times is able to hire workers for $3,500 per month, it should hire Suppose the wages of skilled…

Suppose the supply of apple pickers in Southwest Michigan can be expressed by the equation Qs=2/15(W-10) . An apple farmer advertises a wage of $100 per day to pick apples; however, when the day of the harvest arrives the farmer tells those assembled at the orchard that only 10 pickers are needed, and, as more than 10 pickers showed up looking for work, the wage will fall to the equilibrium. How many pickers showed up to work the apple harvest? What is the equilibrium wage offered by the farmer? Graph the supply of and demand for labor at the orchard, indicating the equilibrium price. Calculate the pickers’ total producer surplus, including the surplus lost by the pickers who were available to work but were not hired.

K0.8 10.2 Consider a firm with the production function F(K, L) 10. (Concretely, imagine that due to technological imperfections, the first 10 units of output are unus- able, so that if the firm produces 100 units of a good, only 90 are of sufficient quality). If the firm is currently using L = 20 units of labor and K = 20 units of capital, what is the elasticity of substitution? (a) 1 (b) 2 (c) 4 (d) 8 (e) 10 =