Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 12, Problem 11P
To determine
The reasons unions are more effective at increasing wage rates in oligopolistic industries than competitive industries.
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3. [TRUE / FALSE] pls explain
When a monopsonist is operating in the long-run, then at theprofit-maximizing output average cost can be increasing.
4. Inclusive, or industrial, unions - Negotiating a higher industry wage
Consider the housing construction industry. Assume that the industry is perfectly competitive in both input and output markets. Suppose that, through
collective bargaining, a labor union 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 $9 to $12 per hour.
The following graph shows the labor demand of an individual firm.
On the following graph, show what happens at the firm level as a result of the union negotiations.
18
15
Demand
12
Supply
Supply
Demand
3
10
15
20
25
30
QUANTITY OF LABOR
---- ---
Co
WAGE RATE
4. In a small isolated town in the Rocky Mountains the only firm that hires workers is a logging
company. The firm's demand for labor and the town's supply of labor are as follows:
Wage
Quantity Supplicd
Quantity Demanded
$1
20
220
40
200
3
60
180
4
80
160
5
100
140
120
120
7
140
100
8.
160
80
180
60
10
200
40
a. How much labor will this profit maximizing monopsonist hire? (Assume that labor can only
be hired in blocks of 20 units)
b. What wage will the monopsonist pay to its workers?
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Similar questions
- What determines the demand for labor for a firm operation in a perfectly competitive out market?arrow_forwardWould you expect the presence of labor unions to lead to higher or lower pay for worker-members? Would you expect a higher or lower quantity of workers hired by those employers? Explain briefly.arrow_forwardPRICE (Dollars per ton) 80 72 64 56 48 40 32 24 16 8 0 0 Demand 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Thousands of tons) Supply (20 firms) Supply (40 firms) Supply (60 firms) True False (?) If there were 60 firms in this market, the short-run equilibrium price of steel would be $ per ton. At that price, firms in this industry would Therefore, in the long run, firms would the steel market. Because you know that competitive firms earn economic profit in the long run, you know the long-run equilibrium price must be $ per ton. From the graph, you can see that this means there will be firms operating in the steel industry in long-run equilibrium. True or False: Assuming implicit costs are positive, each of the firms operating in this industry in the long run earns positive accounting profit.arrow_forward
- 6) Refer to Table below. If the price of output is $20 per unit, the marginal revenue product of the fifth unit of labor is Number of workers 2 3 4 5678 6 Units of output 100 160 210 250 280 300 310arrow_forwardWhy did labor have little say in old firm operations? Too much capital O Too much demand O Too much supply O Too much regulationarrow_forwardWhich of the following is a method used by unions to increase the demand for their members' labor? O A. Decrease the marginal product of union members. O B. Oppose minimum wage laws. OC. Oppose immigration restrictions. O D. Support import restrictions. O E. Increase imported goods and servicesarrow_forward
- 4. Suppose the minimum wage is raised from $7.25 per hour to $15.00 per hour (as has been proposed by activists and politicians across the USA over the last couple of years). In different competitive industries that rely on unskilled labor (where a substantial portion of the workforce is paid the minimum wage) what about these firms or markets would you most want to know to be able to predict the effect on unskilled employment in each industry in the long run? Use any graphs you need to in your explanation. (hint: there are two different elasticities that likely play important roles).arrow_forward10:38 P Vo 4G 73 Time Left: 01:59:48 Tag the question Step-by-step Final solution Chegg Home Expert Q&A My solutions Student question Question 39 of 48 This test: 70 point(s) possible This question: point(s) possible A purely competitive firm faces the marginal product schedule shown in the table below. The price of the product is $20 and the wage rate is $120 per worker. Calculate the marginal revenue product and complete the table. (Enter your responses as whole numbers.)\table Workers, \table[[Marginal Product], [(MP)]]\lable[[Marginal Revenue], [Product { MRP )]]], [10,20,], [11,16,], [12, 12,], [13, 10,], [14,6,], [15,2,]] The firm should hire A. 11 workers B. 12 workers C .15 workers D. 14 workers Economics Sub-subject Search And Select Question 39 of 48 Skip question Exit Back Next Submit your solution =arrow_forward40) Wearitwell Inc sales associates are almost all Caucasian college age men and women. Stockroom employees who unpack and prepare clothing for displays are mostly young Asians and African Americans. This suggests that Weartitwell may need to address its policies and practices in hiring. O lage race age AND race O genderarrow_forward
- 2. Working with Numbers and Graphs Q2 The following graph shows the demand for labor in three unions, X, V, and z. 50 45 40 35 30 25 D, 20 Dy 15 10 5 3 5 6 7 10 QUANTITY OF LABOR (Thousands of workers) Complete the following table by entering the quantity of labor demanded at each wage rate for the three unions. (Hint: Remember to enter the quantity of labor in thousands.) Wage Rate Quantity of Labor Demanded (Dollars per hour) Union Y Union X Union Z 25 30 The wage-employment trade-off is most pronounced for union WAGE RATE (Dolars per hour)arrow_forwardQuestion 3 (a) Why does the labour demand curve slope downwards? (b) A garment factory's production function is provided in the table.The gross profit per unit (difference between selling price and material cost, but not including the cost of labour) is $100. # Workers Output 1 20 36 3 48 4 56 60 62 (i) If the wage rate is $1,000 a week, how many workers should the factory hire? (ii) If a surge in popularity for the factory's brand allows them to raise the product price such that the gross profit rises to $150, how many workers will the factory hire now? (iii) Calculate the number of garments produced in each of the two cases above.arrow_forward(C) Suppose the firm only produces good X and that the price of good Y, a substitute good, decreases. What will happen to the optimal quantity of labor the firm will hire? Explain. (d) If the labor market were a monopsony, would the monopsonist hire more, fewer, or the same number of workers as Que to maximize its profit?arrow_forward
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