Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 19, Problem 2CQQ
To determine
Example of compensating differential.
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Lorna’s Lumberyard is a monopsony. Lorna estimates that at a wage of $10, 100 workers would be willing to work for her. Similarly, at a wage of $12, 200 workers would be willing to work. Her marginal factor cost is:
a. $10.
b. $14.
c. $120.
d. $140.
e. $240.
Benny employs people to sell candy bars at intersections. Assume that Benny can
obtain candy bars to sell for no cost. The marginal product of the last worker Benny
hired is 20 candy bars per hour. Benny pays $7 per worker per hour and sells the
candy bars for $1 each. If the price of candy bars rises to $2. then the:
demand for labor increases.
demand for labor decreases.
quantity demanded of labor increases, but the demand for labor curve does not shift.
quantity demanded of labor decreases, but the demand for labor curve does not shift.
Taco King produces tacos.
The market for tacos is perfectly competitive, and the price
is $2.00 a taco. The labor market is competitive, and the
wage rate is $16.00 a day.
The table shows part of the workers' total product schedule.
If the price rises to $4.00 a taco, how many workers will
Taco King hire?
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Chapter 19 Solutions
Principles of Microeconomics (MindTap Course List)
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- Sal's Salon hires workers to give manicures. The market for manicures is perfectly competitive, and the price of a manicure is $20. The labour market is competitive, and the wage rate is $180 a day. The table shows part of the workers' total product schedule. If the price of a manicure remains at $20 but the wage rate rises to $240 a day, what happens to the value of marginal product of labour? Does Sal's Salon hire more workers or fewer workers? The value of marginal product of labour Sal's Salon hires workers. O A. does not change; fewer O B. does not change; does not change OC. increases; more OD. decreases; fewer Manicures Workers per day 30 4 45 57 6. 66 7 72arrow_forwardThis figure below shows the labor market for automobile workers. The curve labeled S is the labor supply curve, and the curves labeled D1 and D2 are the labor demand curves. On the horizontal axis, L represents the quantity of labor in the market. S Refer to Figure above. What is measured along the vertical axis on the graph? Select one: a. time spent by workers producing automobiles b. the price of automobiles c. the wage paid to automobile workers d. the quantity of automobiles producedarrow_forwardThe information below is for a competitive labor market. A. Calculate the value of the marginal product of labor at X. B. Find the equilibrium wage. C. Find the equilibrium quantity of labor employed.arrow_forward
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