ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
If there is excess supply of labor we would expect __
a) interest rates to increase
b) wages to decline
c) wages to increase
d) interest rates to decline
Expert Solution
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Step 1
Any good needs factors of production to produced. A major factor of production is labour(L). And the cost for this factor of production is the wage that the organization pays to the labours.
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- Demand for Resources A small manufacturing company has the following daily relationship between labor and output: Units of Total Labor Product 1 2 21 3 35 52 61 65 61 7 If the firm sells into a perfectly competitive market and the equilibrium price is $3.25 per unit, compute the following: Marginal Units of Marginal Product Revenue Labor Product 1 2 3 5 7 How many workers will the firm hire is the market wage rate (includining benefits) is $30.00? Wł 3 How many workers will the firm hire is the market wage rate(includining benefits) is $20.00? 4 If the equilibrium price per unit of output dencreases, what would you expect to happen to the number of workers hired? If the firm sells in a imperfectly competitive market such that price per unit starts at $4.50 per ur declines by $0.10 per unit as more as sold, what do you think would happen to the number of labor units hired at $30.00 per unit? 5 2.arrow_forwardWhich of the following is not an assumption of a competitive labor market? O numerous buyers and sellers O interchangeable workers accurate and widely available information workers preferable to machinesarrow_forwardSuppose the hourly wage rate is $14, the rental price of capital is $2 and the price of output is constant at $42 per unit. Firm's production technology is q = 4K0.25 0.75, the marginal product of employment is MPE =3K0.25E-0.25 and the marginal product of capital is MPK = K™ 0.75 0.75. What is firm's optimal demand of labor if firm plans to produce q=19 units of outputs in the long-run? (please keep 1 decimal place in your answer)arrow_forward
- How does the addition error occur when obtaining the market labor demand curve? What to do to avoid this? Explain with the help of the figure.arrow_forwardDescribe what happens to quantity of labor supplied when wages are at the equilibrium level, above equilibrium, and below equilibrium.arrow_forwardThe marginal product of labor for a firm is given by: MPL = 112 - 3H, where H is the number of hours they hire workers to work. For example, the marginal product of the first hour of labor would be 112 - 3*1, and the marginal product of the second hour of labor would be 112 - 3*2, and so on. If the market wage is $18 per hour, how many hours of labor will this firm hire? Round your final answer to two decimal places.arrow_forward
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