Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Chapter 16, Problem 2P
To determine
The number of workers that the firm will hire when the equilibrium wage rate is $550 and $ 650 per week is to be determined.
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- How do you legally reduce labor surplus? Give an example for each.arrow_forwardthe supply of labor will not change if all prices and wage rates by the same percentage is it true or false?arrow_forwardConsider the labour market for farms during the harvest season. Assume the market is perfectly competitive, with a labour demand function QD = 10-P and a labour supply function QS = 3P, where P is the wage. a) What are the consumer (farm owners) surplus and producer (farm workers) surplus in equilibrium? b) What is the price elasticity of demand at the equilibrium? c) Suppose the government subsides the farm owners (consumers) $1 for every unit of labour purchased. Then, compute the quantity of labour traded in the market, the wage received by the workers and the wage paid by the farm owners. d) Calculate the consumer surplus and producer surplus in the presence of the subsidy in part c).arrow_forward
- Minimum wage is an example of what kind of economicarrow_forwardSay that the marginal revenue brought by hiring a worker is at P600/day, and the minimum wage is P537/day, what should the firm do?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
- Suppose 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? What will be the price of a zamboni? If the market for zambonis were competitive, how many zambonis would be produced? If the market for…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. If the market for zambonis were competitive, how many zambonis would be produced? If the market for zambonis were competitive, how many assembly workers would be hired? If the market for zambonis were competitive, at what price would zambonis be sold?arrow_forwardthe supply of labor will not change if all pricess and wage rates increase by the same percentage? is that is falsearrow_forward
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