LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 10, Problem 15P
(a)
To determine
Explain the number of played games.
(b)
To determine
Explain the expanding size of the team rosters.
(c)
To determine
Explain the team salary cap.
(c)
To determine
Explain the rookie salary cap.
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Say the average increase in pay for non-union workers in 2011 is 2% across the U.S. If a workers' union successfully negotiates a 3-year collective agreement that provides a 4.5% raise in 2011, and a 4.3% raise in 2013, then the for-profit employer will typically
Question 42 options:
begin to fire its older union workers.
replace union workers with non-union workers.
curtail expansion of labor as a trade-off.
replace union workers with foreign workers.
The market for plumbers in Boston is currently
in equilibrium. Labor supply is given by Ls = 3
x W and labor demand is given by Ld = 45 -
W (where L = quantity of workers, Ls
quantity of workers supplied, Ld = quantity of
workers demanded, and W = wage). The
plumbers have just unionized and have
negotiated a wage of $25 for all plumbers in
Boston. How many plumbers do you expect
to be unemployed as the result of this
change? Please round your answer to the
nearest integer.
%3D
%3D
%3D
Suppose that a car factory initially hires 1,600 workers at $20 per hour and that each worker works 40 hours per week. Then the factory unionizes, and the new union demands that wages be raised by 25 percent. The firm accedes to that request in collective bargaining negotiations but then decides to cut the factory’s labor force by 30 percent due to the higher labor costs.
Chapter 10 Solutions
LABOR ECONOMICS
Ch. 10 - Prob. 1RQCh. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - Prob. 7RQCh. 10 - Prob. 8RQCh. 10 - Prob. 9RQCh. 10 - Prob. 10RQ
Ch. 10 - Prob. 11RQCh. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10PCh. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Major League Baseball players are not eligible for...Ch. 10 - Prob. 15P
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- Is the National Football League (NFL) a monopsonistic labor market? Why or why not? Your answer should include discussion about what a monopsony is.arrow_forwardConsider 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…arrow_forwardThe Aguiar et al. (2017) study concluded that a revolution in the video game market-better games at a lower price-dramatically increased the amount of time young men spend playing video games and shifted their labour supply curve. In 2015, young men played video games for 3.2 hours per week on average. From 2000 through 2015, average annual hours of work for men aged 21-30, excluding full time students, dropped by 10% . Suppose the labour demand function is L = 200-w, and the supply curve is L = 50 + w-2V, where L is the hours worked, w is the wage, and V is a measure of the quality of video games. By how much do the equilibrium hours and wage vary as V increases?arrow_forward
- A meeting of representatives for labor and management to negotiate contracts is calledarrow_forwardAssume that the marginal cost of hiring additional labor (MCL), the market supply of labor (SL), and the market demand for labor (DL) are determined by the following equations, where w refers to wage and L refers to labor: MCL: w=2+7L SL: w=2+5L DL: w=42−3L Determine how many workers stay unemployed under a monopsony as compared with a perfectly competitive market, assuming firms want to maximize profits in both situations. Write the exactarrow_forwardAccording to the Economics Policy Institute (Mishel and Wolfe, 2019) CEO pay has grown 940% since 1978 while the compensation of the average worker has only risen 12%. While you can easily find sources that provide statistics that conflict with these numbers, you would be hard pressed to find any credible source that refutes the idea that the rate of pay of CEO’s and other upper-level managers has not dramatically increased relative to an organization’s lower-level employees in just about any 10 or more year period over the past 60 years. In the world of Adam Smith, the “invisible hand” of the free market capitalistic model would address inequities/out of balances. Are the forces represented by the “invisible hand” working? Why or why not? Is there an ethical dimension to the discussion of upper-level manager compensation? Why or why not? How does (or does it?) levels of pay of upper management impact the rest of us commoners?arrow_forward
- Suppose the economy consists of a union and a nonunion sector. The labor demand curve in each sector is given by L = 1,000,000 - 20w. The total (economywide) supply of labor is 1,000,000, and it does not depend upon the wage. All workers are equally skilled and equally suited for work in either sector. A monopoly union sets the wage at $30,000 in the union sector. What is the union wage gap? What is the effect of the union on the wage in the nonunion sector?arrow_forwarddarsh is tasked with projecting financial compensation policy strategies for new hires in his relatively successful medium sized distillery. Given that the labor market seems steady and stable, the most likely strategy darsh will utilizie for compensation policy is: market lead market match market lag pay mixarrow_forward
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