Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Question
Chapter 17, Problem 17.3.5PA
To determine
How is salary determined.
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Are the following statements correct or incorrect? Briefly explain:
a. When making the hiring decision, a rational producer should always relay on both the average product of labour and the marginal product of labour.
Homework (Ch 18)
Consider a company operating in a competitive market. The company sells units of output and receives a price of $30 per unit, and pays a daily
market wage of $285 to each worker it employs.
In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers.
Labor
(Number of workers)
Marginal Product of Labor
(Units of output)
Value of the Marginal Product of Labor
(Dollars)
GE (Dollars per worker)
1
500
A
450
400
350
N
300
250
Q
200
On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show
the wage rate. (Note: If you cannot place the wage rate at the level you want, move the two end points individually.)
Hint: Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the value of
the marginal product for the first worker should be plotted with a…
Why might a labor supply curve be backward bending? Explain your answer using the concepts of the income effect and the substitution effect. (You can explain your answer using words or you can draw a graph accompanied with a brief explanation)
Chapter 17 Solutions
Economics (7th Edition) (What's New in Economics)
Ch. 17 - Prob. 17.1.1RQCh. 17 - Prob. 17.1.2RQCh. 17 - Prob. 17.1.3RQCh. 17 - Prob. 17.1.4RQCh. 17 - Prob. 17.1.5PACh. 17 - Prob. 17.1.6PACh. 17 - Prob. 17.1.7PACh. 17 - Prob. 17.1.8PACh. 17 - Prob. 17.1.9PACh. 17 - Prob. 17.2.1RQ
Ch. 17 - Prob. 17.2.2RQCh. 17 - Prob. 17.2.3PACh. 17 - Prob. 17.2.4PACh. 17 - Prob. 17.2.5PACh. 17 - Prob. 17.2.6PACh. 17 - Prob. 17.2.7PACh. 17 - Prob. 17.2.8PACh. 17 - Prob. 17.3.1RQCh. 17 - Prob. 17.3.2RQCh. 17 - Prob. 17.3.3PACh. 17 - Prob. 17.3.4PACh. 17 - Prob. 17.3.5PACh. 17 - Prob. 17.3.6PACh. 17 - Prob. 17.3.7PACh. 17 - Prob. 17.3.8PACh. 17 - Prob. 17.4.1RQCh. 17 - Prob. 17.4.2RQCh. 17 - Prob. 17.4.3RQCh. 17 - Prob. 17.4.4PACh. 17 - Prob. 17.4.5PACh. 17 - Prob. 17.4.6PACh. 17 - Prob. 17.4.7PACh. 17 - Prob. 17.4.8PACh. 17 - Prob. 17.4.9PACh. 17 - Prob. 17.4.10PACh. 17 - Prob. 17.4.11PACh. 17 - Prob. 17.4.12PACh. 17 - Prob. 17.4.13PACh. 17 - Prob. 17.4.14PACh. 17 - Prob. 17.4.15PACh. 17 - Prob. 17.4.16PACh. 17 - Prob. 17.4.17PACh. 17 - Prob. 17.4.18PACh. 17 - Prob. 17.4.19PACh. 17 - Prob. 17.5.1RQCh. 17 - Prob. 17.5.2RQCh. 17 - Prob. 17.5.3PACh. 17 - Prob. 17.5.4PACh. 17 - Prob. 17.5.5PACh. 17 - Prob. 17.5.6PACh. 17 - Prob. 17.5.7PACh. 17 - Prob. 17.6.1RQCh. 17 - Prob. 17.6.2RQCh. 17 - Prob. 17.6.3RQCh. 17 - Prob. 17.6.4PACh. 17 - Many people have predicted, using a model like the...Ch. 17 - Prob. 17.6.6PACh. 17 - Prob. 17.6.7PACh. 17 - Prob. 17.6.8PACh. 17 - Prob. 17.1CTECh. 17 - Prob. 17.2CTECh. 17 - Prob. 17.3CTE
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- 4. Profit maximization Consider Blewitt's Farm, a small blueberry grower relative to the size of the market whose production has no impact on wages and prices. The following table presents Blewitt's production schedule for blueberries: Labor Output (Number of workers) (Pounds of blueberries) 0 0 1 2 3 4 5 сл 20 38 54 68 80 Suppose that the market wage for blueberry pickers is $200 per worker per day, and the price of blueberries is $13 per pound.arrow_forwardI Collado Lumber Company is producing tons of lumber per day. The following table is the costs of production. The managers currently have six machines. The price of output is $5 per unit. The wage of the worker is $55 per worker. From economic theory, we know that the value of the marginal product is price times the marginal product of labor. According to economic theory, a worker should be hired if the value of the marginal product is greater than the marginal cost of hiring a worker. See the table below. Number of machines Number of workers Output The marginal product of labor VMP Wage Marginal cost of hiring an additional worker 6 0 0 xxx xxx $55.00 xxx 6 1 2 2 $10.00 $55.00 $55.00 6 2 14 12 $60.00 $55.00 $55.00 6 3 30 16 $80.00 $55.00 $55.00 6 4 42 12 $60.00 $55.00 $55.00 6 5 50 8 $40.00 $55.00 $55.00 6 6 56 6 $30.00 $55.00 $55.00 6…arrow_forwardThe following graph shows the relationship between a worker’s years of education and the salary he or she is likely to earn. What is wrong with this graph? It doesn’t label the variables on the two axes. It gives no information about the units for the variables. It uses different scales on the two axes. It has no data.arrow_forward
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