Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 18, Problem 5QR
To determine
To determine: Theeffect of immigration on wage rate.
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How might a company continue to do business without paying higher wages?
Jumbo Enterprises is the sole producer of jumbo jets in the economy. Demand for jets is given by y=2122-201p, where y is the number of jets and p is the price of a jet. The
number of jets that Jumbo produces is a function of the number of engineers (N) that it hires. This function is given by y=0.8N. Engineers are hired in a competitive labor
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Find Jumbo Enterprise's profit-maximizing choice of N.
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The demand for labor will remain unchanged
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Chapter 18 Solutions
Principles of Microeconomics (MindTap Course List)
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- If there is a sharp increase in the minimum wage as well as an increase in pessimism about future business conditions, what would we expect to happen in the short run?arrow_forwardA company operates in a competitive market, selling each unit of output for a price of $20 and paying the market wage of $330 per day for each worker it hires.arrow_forwardSuppose a firm purchases labour in a competitive labour market and sells its product in a competitive product market. The firm’s elasticity of demand for labour is 0.4. Suppose further that the wage increases by 5 percent. What will happen to the amount of labour hired by the firm?arrow_forward
- What is the effect of a decrease in population (perhaps caused by the plague) on the market for land? A decrease in the equilibrium rental price of land. An increase in the marginal product of land. A decrease in the supply of land. An increase in the demand for land.arrow_forwardto finance a new health insurance program, the government of Millonia imposes a new $2-per-hour payroll tax to be paid by employers. What do you expect to happen to wages and the size of the workforce? Explain How will this answer change in markets where labor is inelastically demanded? Explainarrow_forwardA carpenter quits his job at a furniture factory to open his own cabinetmaking business. In his first two years of operation, his sales average $100 000 per year and his operating costs for wood, workshop and tool rental, utilities, and miscellaneous expenses average $70 000 per year. Now his old job at the furniture factory is again available. What is the lowest wage at which he should decide to return to his old job? Why?arrow_forward
- Why does the collective behaviour of supply managers have such an impact on economic trends?arrow_forwardMake use of graph (one graph for each question) to describe briefly what the influence of each of the following would be on supply OR demand of labour: 1. An increase in students studying full time 2. An equal increase in the price and productivity of labour 3. A decline in the price of a substitute for a particular type of labourarrow_forwardWhich of the following is likely to increase the supply of labour? a decrease in fringe benefits a relaxation of restrictions on immigration an increase in the value placed on leisure a decrease in the populationarrow_forward
- If the population of the United States suddenlygrew because of a large wave of immigration,what would happen to wages? What wouldhappen to the rents earned by the owners of landand capital?arrow_forwardEconomists Conclude that a tax on the revenues of firms will be shifted in part to consumers of the products of those firms in the form of higher prices. However, they believe that a tax on the rent of land usually cannot be shifted and must be paid entirely by the landlord. What explains the difference?arrow_forwardSuppose a firm purchases labor in a competitive labor market and sells its product in a competitive product market. The firm’s elasticity of demand for labor is -0.4. Suppose the wage increases by 5 percent. What will happen to the number of workers hired by the firm? What will happen to the marginal productivity of the last worker hired by the firm?arrow_forward
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