LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Chapter 10, Problem 6RQ
To determine
Explain the difference between efficient contract and strong efficient contract.
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Table 18-8
The following table shows the production
function for a particular business. The
numbers represent the various labor and
output combinations the firm may choose for
its output on a daily basis.
Labor Output
0
0
70
130
180
220
250
123
4
5
Refer to Table 18-8. Suppose this firm
charges a price of $5 per unit of output and
pays workers a wage equal to $160 per day.
How many workers should this firm hire to
maximize its profit?
2 workers
3 workers
4 workers
5 workers
Use the following information to answer the following questions:
Mickey L. Douglas, owner of MLD Incorporated, knows that the marginal product of labor (MPL) for his
workers can be defined as follows:
MPL = 32 - L
The total output a given level of workers can produce is found as:
Q=32L-1/2 L²
He also knows that the price of his output is $3. His profits can be found as:
Profit=(PxQ)-(W x L)
What wage would be required to allow Mickey to hire the twenty-fifth worker?
O $21
O $7
O $125
O $3
$25
Suppose a firm produces the following products. Calculate and fill in the missing values in the table below.
(Round your answers to the nearest whole number.)
Marginal product of
Value of marginal
Product
Number of workers
Price per unit
labor
product of labor
A
10
170
$1,200
20
130
$12
25
130
$14
30
90
$1,200
In the above case, when the daily wage of the workers is $1400, then the firm will produce the products
only after reducing the number
of workers employed.
The firm observes with the help of the
that as additional labor is employed, the quantity produced for product A increases.
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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