pro s? (LO3, LO4) unlikely to constitute a long-term solution to the pov- erty problem? (LO5) 4. Mention two self-interested reasons that a top earner might favor policies to redistribute income. (LO4) PROBLEMS connect Graw All the workers Stone hires belong to the union. How does the minimum wage affect Stone's decision about how many workers to hire? C. If the minimum wage set by the union had been $400 per week, how would the minimum wage affect Stone's decision about how many workers to hire? d. If Stone again faces a market wage of $250 per week but the price of jeans rises to $45, how many work- ers will the company now hire? 1.Mountain Breeze supplies air filters to the retail market and hires workers to assemble the components. An air filter sells for $26, and Mountain Breeze can buy the components for each filter for $1. Sandra and Bobby are two workers for Mountain Breeze. Sandra can assemble 60 air filters per month and Bobby can assem- ble 70. If the labor market is perfectly competitive, how much will Sandra and Bobby be paid? (LO1) 4. Carolyn owns a soda factory and hires workers in a competitive labor market to bottle the soda. Her com- pany's weekly output of bottled soda varies with the number of workers hired, as shown in the following table: (LO2, LO3) 2. Acme Inc. supplies rocket ships to the retail market and hires workers to assemble the components. A rocket ship sells for $30,000, and Acme can buy the compo- nents for each rocket ship for $25,000. Wiley and Sam are two workers for Acme. Sam can assemble 1/5 of a rocket ship per month and Wiley can assemble 1/10. If the labor market is perfectly competitive and rocket components are Acme's only other cost, how much will Sam and Wiley be paid? (LO1) Number of workers Cases/week 200 360 3. Stone Inc. owns a clothing factory and hires workers in a competitive labor market to stitch cut denim fabric into jeans. The fabric required to make each pair of jeans costs $5. The company's weekly output of fin- ished jeans varies with the number of workers hired, as shown in the following table: (LO2, LO3) 480 560 5 600 a. If each case sells for $10 more than the cost of the materials used in producing it and the competitive wage is $1,000 per week, how many worker should Carolyn hire? How many cases will be pro Jeans (pairs/week) Number of workers market week? duced per 25 1 b.Suppose the Soda Bottlers Union now sets a week minimum acceptable wage of $1,500 per week. A the workers Carolyn hires belong to the union. Ho does the minimum wage affect Carolyn's decisic about how many workers to hire? c. If the wage is again $1,000 per week but the pr of soda rises to $15 per case, how many workers Carolyn now hire? 45 60 72 80 5 85 6 5. Sue is offered a job reshelving books in the Univer of Montana library from noon until 1 p.m. each Fri Her reservation wage for this task is $10 per hour. (L a. If the library director offers Sue $100 per hour much economic surplus will she enjoy as a resu accepting the job? d. It the jeans sell for $35 a pair and the competitive market wage is $250 per week, how many workers Should Stone hire? How many pairs of jeans will the company produce each week? b. Suppose the Clothing Workers Union now sets a weekly minimum acceptable wage of $230 per week. 1 23 4 2 34 LO

Stone Inc. owns a clothing factory and hires workers in a competitive labor market to stitch cut denim fabric into jeans. The fabric required to make each pair of jeans costs $5. The company’s weekly output of finished jeans varies with the number of workers hired, as shown in the following table:

 

Number of workers	Jeans (pairs per week)
0	0
1	25
2	45
3	60
4	72
5	80
6	85

 

a. If the jeans sell for $35 a pair and the competitive market wage is $250 per week, how many workers should Stone hire?

_____ workers

How many pairs of jeans will the company produce each week?

____ pairs of jeans

b. Suppose the Clothing Workers Union now sets a weekly minimum acceptable wage of $230 per week. All the workers Stone hires belong to the union. How does the minimum wage affect Stone’s decision about how many workers to hire?

Stone’s decision (Will/will not) be affected by the minimum wage.

c. If the minimum wage set by the union had been $400 per week, how would the minimum wage affect Stone’s decision about how many workers to hire?

The number of workers employed would be (increased/reduced)   to  ____ workers.

d. If Stone again faces a market wage of $250 per week but the price of jeans rises to $45, how many workers will the company now hire?

_____  workers