![Microeconomics (2nd Edition) (Pearson Series in Economics)](https://www.bartleby.com/isbn_cover_images/9780134492049/9780134492049_largeCoverImage.gif)
Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 4P
To determine
The optimality of Apple’s wage payment to its employees given their productivity.
Expert Solution & Answer
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Students have asked these similar questions
The Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship
between the number of workers Zippy hires, total output, marginal product, and marginal revenue product of labor, with all other inputs being held
constant. Assume that the selling price is $10 per box of paper.
Labor Input
Total Output
Marginal Product
Marginal Revenue Product
Price =
$10
(Workers per day)
(Boxes of paper per day)
(Boxes of paper per day)
(Dollars)
0
0
14
2
26
36
44
5
50
AAAAAA
14
$140
12
$120
10
$100
8
$80
64
$60
$40
6
54
If the wage rate is $50.00 per day, Zippy will hire
workers.
Suppose that the workers in this industry have unionized and have collectively bargained for a wage of $70.00.
As a result of this collective bargaining agreement, Zippy will
the number of workers it hires to hire
workers.
A carpenter quits his job at a furniture factory to open his own cabinetmaking business. In his first two years of operation, his sales average $100 000 per year and his operating costs for wood, workshop and tool rental, utilities, and miscellaneous expenses average $70 000 per year. Now his old job at the furniture factory is again available. What is the lowest wage at which he should decide to return to his old job? Why?
The Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the
relationship between the number of workers Zippy hires and total output, with all other inputs being held constant.
In the following table, for each quantity of labor input, fill in the marginal product (MP) and marginal revenue product (MRP) for Zippy. (Note: When
the price doubles, this will also double the marginal revenue product.)
Labor Input
Total Output
Marginal Product
(Workers per day)
(Boxes of paper per day)
(Boxes of paper per day)
0
14
235
26
36
44
50
AAAAAA
6
54
Assume that the selling price of paper is $10 per box.
If the wage rate is $110.00 per day, Zippy will hire
Continue to assume that the selling price of paper is $10 per box.
If the wage rate is $90.00 per day, Zippy will hire
Assume that the selling price of paper is now $20 per box.
workers.
workers.
If the wage rate remains at $90.00 per day, Zippy will hire
workers.
Marginal…
Chapter 11 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
Knowledge Booster
Similar questions
- The Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship between the number of workers Zippy hires and total output, with all other inputs being held constant. In the following table, for each quantity of labor input, fill in the marginal product (MP) and marginal revenue product (MRP) for Zippy. (Note: When the price doubles, this will also double the marginal revenue product.) Labor Input Total Output Marginal Product Marginal Revenue Product (Workers per day) (Boxes of paper per day) (Boxes of paper per day) Price = $10 Price = $20 (Dollars) (Dollars) 0 0 1 25 2 45 3 60 4 70 5 75 6 77 Assume that the selling price of paper is $10 per box. If the wage rate is $125.00 per day, Zippy will hire ______workers. Continue to assume that the selling…arrow_forwardUse 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 $25arrow_forwardThe 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 %3Darrow_forward
- To save money, some fast food chains are now having their customers place their orders at computer kiosks. Will the kiosks necessarily reduce the total number of workers employed in the fast food industry?arrow_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_forwardCalculate the Marginal Product (MP) at each input level. If the price of printer is $100 each, calculate the Value of the Marginal of labor (VMPL). If the wage rate (per week) is $1800 , how many workers will be employed? If the firm decides to hire 14 workers, what is the maximum wage the firm would be willing to pay?arrow_forward
- Bob White argues that if his wage went up from $10/hour to $20/hour he would still be able to pay rent and feed his family even if he worked half as many hours. So, if his wage increased he would want to work proportionally less. What is strange about Bob White's labor supply curve? it is very elastic it is very inelastic it slopes down it is verticalarrow_forwardIan works at an iron smelter in Pittsburgh, the center of iron production in America. Due to the difficulty in measuring the productivity of individual employees, Ian's employer as well as the other iron smelters all pay an efficiency wage. Adjust the wage line on the graph to reflect this situation. What characteristic of efficiency-wage jobs is not supported by the situation shown in the graph? The wage rate will eventually return to the market-clearing level. Efficiency wages result in an increase in the rate of unemployment. Elevated wages serve as an economic incentive to work harder. Efficiency wage jobs result in a surplus of workers at the wage being offered. Wage ($ per hour) Wage Quantity of workers (in thousands) S Oarrow_forwardWould the owner of a profit-maximizing clothing store hire another worker for $85 per day if the additional worker added faster service, increasing sales and revenue by $97 per day? Why or why not? Explain your answer.arrow_forward
- The marginal product of labor for a firm is given by: MPL = 112 - 4H, 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 - 4*1, and the marginal product of the second hour of labor would be 112 - 4*2. If the market wage is $16 per hour, how many hours of labor will this firm hire? Round your final answer to two decimal places.arrow_forwardProblem #3: Labor Unions (20 points) Sarah is thinking if she should join the labor union in their company. Her utility function is U (c, 1) = (cl)05, where c denotes consumption, and I denotes leisure. She has 16 hours each day to allocate between work and leisure. 1. Given her non-labor income is zero, how many hours will Sarah work at $7 wage/hour? In addition, how much consumption and leisure can she afford, and how much utility can she achieve from this? 2. If the labor unioh bargains for a $10.5 overtime pay rate for work hours beyond 8 hours, will Sarah benefit from this proposal? 3. If, instead, the labor union proposes an 8-hour workday, will Sarah benefit from it?arrow_forwardAssume that the firms in the United States set their price as a markup on their wage cost. Assume every firm is identical in the United States, and that they set a wage equal to $22. Recall that the number of employed workers in the United States is 153.5 million. Q 6. Draw the average product of labor on the graph. This value will vary based on how you draw your own graph, but it needs to make sense given the wage. Is the average product of labor greater than, equal to, or less than the wage?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337617383/9781337617383_smallCoverImage.gif)
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337617406/9781337617406_smallCoverImage.gif)