Microeconomics (7th Edition)
7th Edition
ISBN: 9780134737508
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 17, Problem 17.5.6PA
To determine
The disadvantage of payment based on quantity.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
11. Calculating the price elasticity of supply
Dina is a stay-at-home parent who lives in Denver and does some consulting work for extra cash. At a wage of $25 per hour, she is willing to work 6
hours per week. At $35 per hour, she is willing to work 16 hours per week.
Using the midpoint method, the elasticity of Dina's labor supply between the wages of $25 and $35 per hour is approximately
that Dina's supply of labor over this wage range is
which means
V4. Suppose that you have the following information about the market for employees in your buisness: Supply: W=20+N
Demand: W=40-N
a. Suppose that the union negotiates a team size of only 5 employees. Draw this graphically and calculate the new equilibrium wage number of employees.
b. Draw this graphically and calculate the equilibrium wage and number of employees hired.
5 For each of the following examples, choose the case with the lower (more inelastic) wage elasticity. Assume an $18 per hour wage rate:
Serpent Brewing is a brewery in Nova Scotia. Would you expect Serpent Brewing's demand for beer tasters to have a lower wage elasticity than their beer production line workers? Explain.
Nova Scotia's Non-Essential Pesticides Control Act, which came into effect in 2012, covers the "cosmetic" use of pesticides for lawn care and ornamental plants on residential, commercial, government, and institutional properties. Would you expect a farms demand for farm labour for weeding, in a jurisdiction where herbicides are banned for environmental reasons to have a lower wage elasticity than a jurisdiction where they are not? Explain.
A coal mine's demand for labour, where the mine has a local monopoly in the sale of coal, versus a mine that sells coal in a competitive market.
The demand for workers in a tobacco (cigarette) factory versus the demand for…
Chapter 17 Solutions
Microeconomics (7th Edition)
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 - Prob. 17.6.5PACh. 17 - Prob. 17.6.6PACh. 17 - The total amount of oil in the earth is not...Ch. 17 - Prob. 17.6.8PACh. 17 - Prob. 17.1CTECh. 17 - Prob. 17.2CTECh. 17 - Prob. 17.3CTE
Knowledge Booster
Similar questions
- According to the Wall Street Journal, Mitsubishi Motors recently announced a major restructuring plan in an attempt to reverse declining global sales. Suppose that as part of the restructuring planMitsubishi conducts an analysis of how labour and capital are used in its production process. Prior to restructuring Mitsubishi’s marginal rate of technical substitution is 0.15 ( in absolute value). To hire workers. Suppose that Mitsubishi must pay the competitive hourly wage of US$ 15. In thestudy of production process and markets where capital is procured, suppose that Mitsubishi determine that its marginal productivity of capital is 0.5 small cars per hour at its new targeted level of output and that capital is procured in a highly competitive market. The same study indicates that the average selling price of Mitsubishi’s smallest car is US$ 9500. Determine the rate at which Mitsubishi can rent capital and marginal productivity of labour at its new targeted level of output. To minimize…arrow_forwardQ5 Those working for Amazon have been trying to form a union. Suppose that these workers are successful in forming a union and call themselves the Amazon Delivery Workers. Assume the union successfully negotiated a 14 percent wage increase and the result was that the quantity of labour demanded decreased by 10 percent. Given a fixed labour demand curve, we can conclude that Multiple Choice labour demand is inelastic. the coefficient of elasticity of labour demand is equal to 1. labour demand is elastic. the labour demand curve is upsloping. economies of scale has been achieved.arrow_forwardExplain and discuss the relationship between the elasticity of demand for the product and the elasticity of demand for the labor that produces the product. Based on your explanation question 1 above, discuss how that relationship between the elasticity of demand for products and labor would affect your job searching strategy in the future. Explain how the relationship between elasticity of demand for the product and labor would affect your major or specialization while you are studying at a higher education institution.arrow_forward
- Need some assistance with question. Explain and discuss the relationship between the elasticity of demand for the product and the elasticity of demand for the labor that produces the product. Based on your explanation question 1 above, discuss how that relationship between the elasticity of demand for products and labor would affect your job searching strategy in the future. Explain how the relationship between elasticity of demand for the product and labor would affect your major or specialization while you are studying at a higher education institution.arrow_forward4. 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 $15 to $20 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. (? 30 25 Demand Supply Supply 15 10 Demand 5 12 24 36 48 60 72 QUANTITY OF LABOR WAGE RATE 20arrow_forwardWage Rate D₁ D₂ Quantity of Labor Refer to the above graph. What will shift D₁ to D₂? O An increase in the price of a substitute input (if the output effect is greater than the substitution effect) O A decrease in the price of a substitute input (if the substitution effect is greater than the output effect) O A decrease in the price of a substitute input (if the output effect is greater than the substitution effect) An increase in the price of a complementary resourcearrow_forward
- A restaurant hires cooks and waiters. Cooks earn $10 an hour; waiters earn $5 an hour. The manager, who wants to maximize the number of meals served given a fixed payroll of $45 per hour, expects the following from cooks and waiters: Number of employees Total number of meals served Cooks Waiters 1 200 120 2 380 230 3 540 310 4 660 360 5 740 390 Given the information in the table, and given the fixed payroll, the maximum number of meals that can be served is____arrow_forward1. Suppose a short-run production function is described as Q40L 0.04L2 where L is the number of labors used each hour.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_forward
- Wt NS N₂ Figure 1: Labor Supply Curve 3. Figure 1 (above) shows a theoretical labor supply curve. For wages below w, what is true about labor supply? (a) Labor supply is increasing with the wage (b) The income effect relatively dominates the substitution effect with respect to the wage (c) The substitution effect relatively dominates the wealth effect with respect to the wage (d) Labor supply is perfectly inelastic (e) Labor supply is perfectly elasticarrow_forward1. Computing labor productivity and its relationship to the demandfor labor Sizzler's produces charcoal grills in a small manufacturing facility and sells the grills in a competitive market. The following table presents the company's production function: Labor (Number of workers) 0 OUTPUT (Grills) 400 360 320 280 Use the blue points (circle symbol) to plot the production function for Sizzler's on the following graph. 240 200 160 120 80 40 0 1 0 2 3 4 5 1 Output (Grills) 0 95 185 260 320 355 2 3 LABOR (Number of workers) 4 5 Production Function (?) Calculate the marginal product of labor (MPL) of each worker, and then plot the MPL curve on the following graph using the blue points (circle symbol).arrow_forwardAssume a woman’s non-labor income elasticity is -0.2 and own wage elasticity is 0.4 and she originally works 30 hours per week. b. What is the effect of a wage increase from $35/hour to $40/hour on her weekly labor income? Go back to assuming her original hours worked (30 hours each week). Treat this part separately from part a.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
Principles of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc