Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 18, Problem 1PA
Subpart (a):
To determine
The demand and equilibrium price of apple.
Subpart (b):
To determine
The demand and equilibrium price of apple.
Subpart (c):
To determine
The demand and equilibrium price of apple.
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Suppose that the president proposes a new lawaimed at reducing healthcare costs: All Americans arerequired to eat one apple daily.a. How would this apple-a-day law affect thedemand and equilibrium price of apples?b. How would the law affect the marginal productand the value of the marginal product of applepickers?c. How would the law affect the demand andequilibrium wage for apple pickers?
What happens to the supply curve when prices of factor of production rises
Consider the market for labor depicted by the demand and supply curves that follow.
Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator.
Graph Input Tool
Market for Labor
24
I Wage
(Dollars per hour)
21
Supply
3.00
Labor Supplied
(Thousands of
workers)
18
Labor Demanded
(Thousands of
workers)
1,050
150
15
12
Demand
3
150 300 450 600 750 900 1050 1200
LABOR (Thousands of workers)
Complete the following table with the quantity of labor supplied and demanded if the wage is set at $15.00. Then indicate whether this wage will
result in a shortage or a surplus.
Hint: Be sure to pay attention to the units used on the graph and in the table. For example, type in 100 for 100,000 workers.
Labor Demanded
Labor Supplied
Wage
(Thousands of workers) (Thousands of workers) Shortage or Surplus?
$15.00
Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $15.00.
Which of the following statements…
Chapter 18 Solutions
Principles of Microeconomics (MindTap Course List)
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Similar questions
- Explain how to find the equilibrium priceand quantity for a factor of production.arrow_forwardWhat happens to the supply curve when the price of the factor of production would rise?arrow_forwardYou are given a scenario where this a change in a factor of production or a change in demand for an item. You need to explain in sentence form how this would change demand for labor. There is an increase in the price of steel. You make tractors.arrow_forward
- You publish a magazine for calculator collectors. To produce and distribute this magazine, you use a number of inputs: • computers labor . раper • postage • staplers What is the impact on the market, if the price of labor goes down ? Choose one: O A. The demand for the magazine shifts to the right, and the supply curve shifts to the left. The equilibrium price rises, but there is an unknown change in the equilibrium quantity. O B. The demand for the magazine does not change, and the supply curve shifts to the left. The equilibrium price rises, but the equilibrium quantity falls. O C. The demand for the magazine does not change, and the supply curve shifts to the right. The equilibrium price falls, but the equilibrium quantity rises. O D. The demand for the magazine shifts to the left, and the supply curve shifts to the right. The equilibrium price falls, but there is an unknown change in the equilibrium quantity.arrow_forwardWhat is the effect if the cost of labor increases? O Price increases, quantity increases O Price decreases, quantity decreases O Price decreases, quantity increases O Price increases, quantity decreasesarrow_forwardYou are given a scenario where this a change in a factor of production or a change in demand for an item. You need to explain how this would change demand for labor. 1. The coronavirus pandemic forces people to shelter in place. You are an airplane mechanic looking for work in Louisville where UPS is headquartered.arrow_forward
- Suppose Fred produces 500 litres of milk every day with 10 workers. The price of milk is $12 per litre, and each worker is paid $550 daily. If the marginal product of the last worker employed is 40 litres of milk, explain whether Fred is maximizing his profit. If not, can Fred increase his profit by employing more or fewer workers? If Fred buys more dairy cattles, how will it affect his demand for labor? Explain with a diagram.arrow_forwardOver the past 30 years, technological advances havereduced the cost of computer chips. How do you thinkthis has affected the market for computers? For computersoftware? For typewriters?arrow_forwardImagine a firm that employs two types of workers – some with computer skills and others withno technology related skills. (i) Explain how a firm’s production function is related to its marginal product of labour, howa firm’s marginal product of labour is related to the value of its marginal product and how afirm’s value of marginal product is related to its demand for labour. (ii) Explain how the wage can adjust to balance the supply and demand for labour whilesimultaneously equalling the value of the marginal product of labour.arrow_forward
- wheat is the main input in the production of flour. all else equal, if the price of wheat decreases, what would we expect?arrow_forwardsuppose Fred produces 500 litres of milk every day with 10 workers. the price of milk is $12 per litre, and each worker is paid $550 daily. if th margin product of the last worker employed is 40 litres of milk, explain whether Fred is maximizing his profit. If not, can Fred incrase his profit by employing more or fewer workers? If Fred buys more dairy cattles, how will it affect his demand for labor? Explain with a diagram.arrow_forwardWhat is the best example of a marginal change? After graduating from university, Neville's income increases from $1000 per month to $1,100 per month. Jadelyn completes the six-month probationary period at her job and is now paid $11.25 per hour instead of $11.00. Housing prices in an area increase by 50% when a new freeway is built in a small town. O A hard freeze wipes out half of the potato crop in Prince Edward Island and the price of potatoes doubles.arrow_forward
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