Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 17, Problem 3DQ
To determine
Individual and market supply curve.
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Students have asked these similar questions
A single firm is the only employer in a labour market. The marginal revenue product, labour supply, and
marginal factor cost curves that it faces are displayed in the diagram below. Use this information to answer the
following questions.
1. How many units of labour will this firm employ in order to maximize it's economic profits?
2. what hourly wage rate will this firm pay it's workers?
3. What is the total amount of wage payments that this firm will make to its workers each hour?
per Hour ($)
Wage Rate, Marginal Factor Cost,
Revenue Product
and Marginal
28
20
13
10
0
1
3
1
C
S
X
MFC
MRP
1000
1600
Quantity of Labour per Time Period
Please answer with work on how to complete this problem.
Dolls are fabricated in a process with two resources. The first resource has a capacity of 1.5 dolls per hour.
The capacity of the second resource is 0.99 dolls per hour. The first resource has 7 workers and the second
resource has 9 workers. Demand for this process is 1.1 dolls per hour. Wages are $24 per hour.
Instruction: Round your answer to two decimal places.
What is the cost of direct labor (in $)?
per unit
Chapter 17 Solutions
Economics (Irwin Economics)
Ch. 17.3 - Prob. 1QQCh. 17.3 - Prob. 2QQCh. 17.3 - Prob. 3QQCh. 17.3 - Prob. 4QQCh. 17.A - Prob. 1ADQCh. 17.A - Prob. 2ADQCh. 17.A - Prob. 3ADQCh. 17.A - Prob. 4ADQCh. 17.A - Prob. 5ADQCh. 17.A - Prob. 1ARQ
Ch. 17.A - Prob. 2ARQCh. 17.A - Prob. 3ARQCh. 17.A - Prob. 4ARQCh. 17.A - Prob. 1APCh. 17.A - Prob. 2APCh. 17 - Prob. 1DQCh. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQCh. 17 - Prob. 6DQCh. 17 - Prob. 7DQCh. 17 - Prob. 8DQCh. 17 - Prob. 9DQCh. 17 - Prob. 10DQCh. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 1PCh. 17 - Prob. 2PCh. 17 - Prob. 3PCh. 17 - Prob. 4PCh. 17 - Prob. 5P
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- Assume a firm is a monopsonist that can hire its first worker for $6 but must increase the wage rate by $3 to attract each successive worker. Draw the firm’s labor supply and marginal resource cost curves and explain their relationships to one another. On the same graph, plot the labor demand data of question 2. What are the equilibrium wage rate and level of employment? Why do these differ from your answer to question 9?arrow_forwardProblem 51: With the table below showing the firm's outputs given the labor inputs: Labor 1 2 3 4 5 7 Quantity Total Output 20 35 47 57 65 70 a. Identify the profit maximizing labor quantity if w = $16/hr. and P of Q = $2/unit b. Determine the same as letter (a) but the wage is higher at w = $20/hr. c. Determine the same as letter (a) but the P of Q is now $3.5/unitarrow_forwardIn the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input. The cost and output structure that the firm faces is depicted in the following table Suppose that for the firm, the goods market is perfectly competitive. The market price of the product is $5 at each quantity supplied by the firm Marginal Factor Cost Total Physical Product 100 109 77 117 108 124 143 130 182 135 225 What is the amount of labor that this profit-maximizing firm will hire? workers (Enter a numerio response using an integer) Labor Supplied 10 11 12 13 14 15 Hourly Wage Rate (5) 7 9 11 13 15 Total Wage Cost 50 27 31 35 39 43 Sitearrow_forward
- The following diagram provides the demand for labour (DL) of a remote gold mine, and the local community's supply of labour (SL). The mining company has a monopsony in the local labour market. W ($ per week) 2000 1500 1000 500 0 L (miners) 5 10 15 20 25 30 1. Use the information in the diagram to provide an equation for the demand for labour function and the supply of labour function. Show your work in the space provided. 0 SL 2. From the information in the diagram, estimate the mine's expenditure on labour (E) function its marginal expenditure on labour (ME) function. Show your work in the space provided. 3. The profit maximizing monopsonist will Q = miners and pay them a wage w = $_ week. Show your work in the space provided and in the above diagram. 4. The Dead-weight-loss from monopsony is DWL = $_ this paper and on the above diagram. Show your work on the back of perarrow_forwardThe Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship between the number of workers Zippy hires, total output, marginal product, and marginal revenue product of labor, with all other inputs being held constant. Assume that the selling price is $10 per box of paper. Labor Input Total Output Marginal Product Marginal Revenue Product Price = $10 (Workers per day) (Boxes of paper per day) (Boxes of paper per day) (Dollars) 0 0 14 2 26 36 44 5 50 AAAAAA 14 $140 12 $120 10 $100 8 $80 64 $60 $40 6 54 If the wage rate is $50.00 per day, Zippy will hire workers. Suppose that the workers in this industry have unionized and have collectively bargained for a wage of $70.00. As a result of this collective bargaining agreement, Zippy will the number of workers it hires to hire workers.arrow_forwardThe Labor Market The following two graphs show the labor market condition in an industry of a hypothetical country. The firms in this country are perfectly competitive in the output market. The labor market is also perfectly competitive. Assume that each workday has 8 hours in it and there are 20 workdays in a month. Now let's do some number crunching. Demand Side of the Market The following graph shows marginal product of labor (MPL) faced by an individual firm. For example, it shows that the first worker hired will produce 110 units of the product. The second worker will produce 100 units. There are 1,000 identical firms in the industry. The market price of the product produced is $40 per unit. MPL 130 120 110 100 90 80 70 60 50 40 30 20 10 0 0 1 2 3 4. 5 6 7 9 10 11 Labor (Persons)arrow_forward
- EatHub is a food delivery service that hires drivers (labor) and rents delivery vehicles (physical capital) to manage its operations. The current wage rate for drivers is $8 per hour, while the rental rate for vehicles is $10 per hour. Each driver can complete 50 deliveries per hour (marginal product of labor), and each vehicle enables 60 delivers per hour (marginal product of capital). Which of the following statements is the correct advice one would offer to EatHub about its current combination of labor and capital? EatHub should employ more drivers and increase the number of delivery trucks rented. EatHub should layoff some drivers (decrease the number workers employed) and increase the number of delivery trucks rented. EatHub should layoff some drivers (decrease the number workers employed) and decrease the number of delivery trucks rented. EatHub should not change its current combination of drivers employed and delivery trucks rented. EatHub should employ more drivers and decrease…arrow_forward3. Consider graphs G1 and G2. Complete the following for each: a. What kind of labor market is the firm hiring from? b. Locate, show using straight line boundaries in blue ink, and label (using geometric notation) regions whose areas equal to TR, TCL, and accounting profits. c. For the monopsony, re-construct the graph as though it were the other kind (i.e. if it's one-sided, make it two sided with the Union Wage rate being the competitive wage rate; or remove the union wage rate if it's two sided). Locate and label (using geometric notation) regions whose areas equal to TR, TCL, and accounting profits under the union or one-sided monopsonist's optimal wage rate. MFCL (1) (0)6 at La sida so SL-MPCL MAP =D ( 47 26 MRP, EDL Warrow_forwardRefer to the following table. Labor Output Price 0 0 $2.20 1 16 2.00 2 31 1.80 3 45 1.60 4 58 1.40 5 69 1.20 6 78 1.00 Assume that the labor market is perfectly competitive. What are the values of marginal product and the marginal revenue product, respectively, for the third worker? $81.00; $62.00 $19.00; $5.40 $25.20; $19.00 O $81.00; $5.40arrow_forward
- Consider the Labor Economics Question. This will provide insight into the idea of the optimal number of workers and the value of the marginal product of labor. If wages in the restaurant is $20.00 per hour and the price of a Hamburger is $8.00 and the production function for the workers is: Q = 11L – 0.25L^2 a. How many workers should Your Restaurant employ during the lunch hour to maximize profits? 1 Point (note—the value of the marginal product of labor and the marginal revenue product are the same)arrow_forwardWAGE RATE Aplia Homework: Labor Markets and Labor Unions 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 $24 to $32 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. Demand Demand Supply Supply 40 00 80 100 120 QUANTITY OF LABOR Now consider the effects of the wage change on the entire industry. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.…arrow_forwardConsider the Labor Economics Question. This will provide insight into the idea of the optimal number of workers and the value of the marginal product of labor. If wages in the restaurant is $16.80 per hour and the price of a Hamburger is $8.30 and the production function for the workers is: Q = 11L – 0.25L2 How many workers should Your Restaurant employ during the lunch hour to maximize profits? 1 Point (note—the value of the marginal product of labor and the marginal revenue product are the same) We maximize profits which are total revenues less total costs:arrow_forward
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