the housing construction industry. Assume the industry is perfectly competitive in input and output markets. Suppose that, through collective bargaining, a labor union successfully negotiates an industry-wide wage for various kinds of labor (electricians, plumbers, and so on). In particular, it succeeds in negotiating a wage increase for carpenters from $12 to $16 per hour The following graph shows the demand for labor and the supply of labor for the entire industry. On the following graph, use the purple points (diamond symbol) to plot the new industry supply curve. Then use the black point (plus symbol) to show the effect of the union negotiations on the quantity of labor demanded in the industry. WAGE RATE Supply mand + New supply of labor *

the housing construction industry. Assume the industry is perfectly competitive in input and output markets. Suppose that, through collective bargaining, a labor union successfully negotiates an industry-wide wage for various kinds of labor (electricians, plumbers, and so on). In particular, it succeeds in negotiating a wage increase for carpenters from $12 to $16 per hour The following graph shows the demand for labor and the supply of labor for the entire industry. On the following graph, use the purple points (diamond symbol) to plot the new industry supply curve. Then use the black point (plus symbol) to show the effect of the union negotiations on the quantity of labor demanded in the industry. WAGE RATE Supply mand + New supply of labor *

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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к Consider production function Q i. Find RTS ii. Is above production function homogenous? Homothetic? iii. If price of K is r, price of L is w and Price of Q is P, then find profit maximization level of L and K iv. Find Out put supply function v. Find Indirect Profit Function Q.
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10 20 30 40 50 More than 50
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Imagine there is a firm that only uses labor to produce goods and that its production function is given by Y(L)=5L-L^2. The price of the firm’s output is equal to 1. Let’s assume the firm is a price taker on the product market but is a local monopsony for employment. Imagine that its marginal cost is given by 2+L. Imagine that labor supply is given by 1+L How much labor does the firm want to use? What will be the wage it pays? How many people will work if the government imposes a minimal wage of 2.25? How will this affect the firm’s profit? Calculate and compare before and after the introduction of the minimum wage.
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