LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 11, Problem 4RQ
To determine
Identify how a large prize spread in a tournament elicits a higher level of work effort from the participants.
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Students have asked these similar questions
When a factor market has only one demander of labor, the market is labeled a (n)
(A) Natural mpnopoly
(B) Labor union
(C) Competitive market
(D) Monopsony
(E) Oligopoly
Understanding how shirking decreases team output
Yvette sells bottled water from a small stand by the beach. On the last day of summer vacation, many people are on the beach, and Yvette realizes that she can make a lot more money this day if she hires someone to walk up and down the beach selling water. She finds a college student named Sean and makes him the following offer: They'll each sell water all day and split their earnings (revenue minus the cost of water) equally at the end of the day. Yvette knows that if they both work hard, Sean will earn $100 on the beach and Yvette will earn $200 at her stand, so they will each take home half of their total revenue: $100+$2002=$150$100+$2002=$150. If Sean shirks, he'll generate only $60 in earnings. Yvette does not know that Sean estimates his personal cost (or disutility) of working hard as opposed to shirking at $25.
Once out of Yvette's sight, Sean faces a dilemma: work hard (put in full effort) or shirk (put in low effort).…
The Alchian and Demsetz theory of why business firms exist suggests that
there are only advantages to team production.
disadvantages of team production may outweigh the disadvantages of individual production.
individual production is more efficient than team production.
the sum of team production is sometimes greater than the sum of individual production.
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Similar questions
- A meeting of representatives for labor and management to negotiate contracts is calledarrow_forwardSuppose that you have the following information about the market for players on your team: Supply: W=5+N Demand: W=35-2N a. Draw this graphically and calculate the equilibrium wage and number of players on the team. b. Suppose that the players union negotiates a roster size of only 5 players on a team. Draw this graphically and calculate the new equilibrium wage number of players on the team.arrow_forwardOne of these four answers could cause the demand curve for labor to shift to the right. Which one? Group of answer choices a decrease in the firm's product price an increase in demand for the firm's product a decrease in labor productivity an increase in the wage ratearrow_forward
- Suppose the local economy experiences an influx of both skilled and unskilled workers, what will happen to prices of goods and services? Group of answer choices Since this increases the supply of labor, prices and wages both decrease. Since this increases the demand for labor, prices and wages both increase. Since this decreases the supply of labor, prices and wages both decrease. Since this increases the marginal product of labor, prices and wages both decrease. A worker on a Texas oil rig is likely to earn _______ than a reception because _________. Group of answer choices less; the job has unattractive characteristics. more; the job is more fun. more; the job is more prestigious. more; the job is more dangerous. please answer two questionsarrow_forwardA firm is thinking of hiring an additional worker to their organization who can increase total productivity by 100 units a week. The cost of hiring him is $1,500 per week. If the price of each unit is $12, which of the following is correct? Group of answer choices the MR of hiring the worker is $1,500. The MC of hiring the worker is $1,200. The worker should be hired at that wage because the marginal benefit exceeds the marginal cost. All of the above are correct. None of the above is correct.arrow_forwardSuppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If hiring another worker would increase output by three units per hour, then to maximize profits the firm should Group of answer choices not change the number of workers it currently hires not hire an additional worker. hire another worker. There is not enough information to answer the question.arrow_forward
- Maria is an industrial engineer at a Nissan plant. Using the interdependence principle, explain why and how she should change production plans if one of her engine suppliers cuts the price they charge Nissan by 50%. What about if workers unionize and demand a 12% across-the-board pay raise?arrow_forwardAn increase in the productivity of labor induces a) a firm to hire fewer workers since fewer workers are needed with the increase in productivity. b)an increase in the cost of labor. c) a firm to offer a higher wage for workers since the workers are now more productive. d) an increase in the demand for labor.arrow_forwardSuppose that Zamboni Enterprises is the only company that sells zambonis (ice resurfacing machines). To produce the machines, the company hires assembly workers. Since these workers can work in many different companies, Zamboni Enterprises must pay them the market wage, which is equal to $6. The number of zambonis that the company produces, which is denoted by y, is proportional to the number of assembly workers that it hires, which are denoted by N; in particular, the production function is given by y=0.76N. The economywide demand for zambonis is given by the following demand function: y=2191-219p, where y is the number of zambonis that consumers are willing to purchase at price p. Given this market structure, how many assembly workers will Zamboni Enterprises choose to hire? How many zambonis will Zamboni Enterprises produce and sell?arrow_forward
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