Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 20, Problem 6IAPA
To determine
Graphical representation of Lorenz curve to show changes in quantities of two types of labour.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
In Akron, 150 people are willing to spend an hour working as yoga instructors for an hourly wage of $10. For each additional $5 that the wage
increases above $10, an additional 50 people are willing to spend an hour working.
For hourly wages of $10, $15, $20, $25, and $30, plot the daily labor supply curve for yoga instructors on the following graph.
50
45
40
35
&
WAGE (Dollars per hour)
20
15
10
5
0
0
50
100
150 200 250 300 350
LABOR (Number of workers)
400 450 500
Supply
What is one explanation for why this labor supply curve is upward sloping?
Wages have to increase to accommodate union pressure.
Unemployment benefits are steadily declining.
The opportunity cost of leisure decreases as wages decrease.
People prefer to spend time doing leisure activities rather than working.
?
In Okennewick, 180 people are willing to spend an hour working as pizza makers for an hourly wage of $20. For each additional $5 that the wage
increases above $20, an additional 45 people are willing to spend an hour working.
For hourly wages of $20, $25, $30, $35, and $40, plot the daily labor supply curve for pizza makers on the following graph.
WAGE (Dollars per hour)
50
45
40
35
25
20
15
10
5
0
0
45
+
90
135 180 225 270 315
LABOR (Number of workers)
360
405
450
Supply
What is one explanation for why this labor supply curve is upward sloping?
The opportunity cost of leisure increases as wages increase.
Labor production functions exhibit diminishing marginal returns.
Wages have to increase to accommodate union pressure.
O Firms are willing to hire more pizza makers at a lower wage.
Martin's Magical Milk Farm produces cow's milk and sells it to a local store for $2.20 per gallon.
Agricultural workers in the area are paid a fixed wage rate of $90 per day. Use this information
and the information in the table below to answer the questions that follow.
What is the marginal product of labour for employing a third
worker?
What is the value of marginal product of labour for
employing a sixth worker?
$
Workers
0
1
2
3
4
5
6
Quantity of
Milk per
day(gallons)
0
70
130
180
220
240
250
Units
Chapter 20 Solutions
Foundations of Economics (8th Edition)
Ch. 20 - Prob. 1SPPACh. 20 - Prob. 2SPPACh. 20 - Prob. 3SPPACh. 20 - Prob. 4SPPACh. 20 - Prob. 5SPPACh. 20 - Prob. 6SPPACh. 20 - Prob. 7SPPACh. 20 - Prob. 8SPPACh. 20 - Prob. 9SPPACh. 20 - Prob. 1IAPA
Ch. 20 - Prob. 2IAPACh. 20 - Prob. 3IAPACh. 20 - Prob. 4IAPACh. 20 - Prob. 5IAPACh. 20 - Prob. 6IAPACh. 20 - Prob. 7IAPACh. 20 - Prob. 8IAPACh. 20 - Prob. 9IAPACh. 20 - Prob. 10IAPACh. 20 - Prob. 11IAPACh. 20 - Prob. 1MCQCh. 20 - Prob. 2MCQCh. 20 - Prob. 3MCQCh. 20 - Prob. 4MCQCh. 20 - Prob. 5MCQCh. 20 - Prob. 6MCQCh. 20 - Prob. 7MCQ
Knowledge Booster
Similar questions
- Use the table below. Marginal Total Total Marginal Product revenue Workers Produce Revesue per Product Price (5) product per (Output) hours ($) hour 2,50 25 25 2.50 63 62.50 36 11 2.50 90 27.50 45 2.50 113 22.50 50 2.50 125 12.50 55 is 2.50 138 12.50 How many workers would the firm hire if it were required to pay a wage of $25 per hour? O 2 3. Osarrow_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_forwardWhat is one explanation for why this labor supply curve is upward sloping? O O OO Firms are willing to hire fewer secretaries at a higher wage. Labor production functions exhibit diminishing marginal returns. The opportunity cost of leisure decreases as wages decrease. Unemployment benefits are steadily declining.arrow_forward
- Fill in the below table, the wage equals AED 300 for each worker. In addition, each unit of output is sold at a price of AED 10. Number of workers Total Output Marginal Product of Labor (MPL) Value of Marginal Product of Labor VMPL = P x MPL Wage per Worker W Profit Margin (PM)PM=VMPL-Wage 0 0 - - - - 1 60 300 2 110 300 3 150 300 4 180 300 5 200 300 6 210 300arrow_forwardThe marginal revenue product of labor (MRPL) for an employer is shown in the figure to the right. Suppose the market wage is $8.00 per hour. How many hours of labor should the employer hire? The employer should hire hours of labor. (Enter your response as an integer value.) Marginal revenue product of labor 22- 20- 18- 16- 14- 12- 10- 8- 6- 4- 2- 04 0 1 2 5 7 8 Quantity of labor (hours) 9 W MRPL 10 11 Q Qarrow_forwardThe following table lists the name, gender, height, and minimum wage 10 people are willing to accept to work as personal assistants at a prestigious law firm. Height Minimum Wage Name Gender (Inches) (Dollars per week) Neha F 66 $309 Simone F 64 $321 Ana 68 $344 Rajiv M 70 $367 Yakov 70 $390 Dina 66 $402 Charles M 71 $425 Lorenzo M 70 $448 Gilberto M 63 $460 Juanita F 68 $483 The lowest wage that the law firm can pay to hire five personal assistants is $ per week. Suppose the head of the law firm has a preference for tall employees because he thinks it will increase revenue, and thus, he imposes the restriction that all personal assistants hired must be at least 67 inches in height. Under this new regulation, the wage rate the law firm must pay to attract five personal assistants rises by S per week.arrow_forward
- In Orlando, 135 people are willing to spend an hour working as yoga instructors for an hourly wage of $20. For each additional $5 that the wage increases above $20, an additional 45 people are willing to spend an hour working. For hourly wages of $20, $25, $30, $35, and $40, plot the daily labor supply curve for yoga instructors on the following graph. ? 50 45 40 R 8 WAGE (Dollars per hour) 88 20 15 10 5 0 0 45 90 135 150 225 270 315 300 405 450 LABOR (Number of workers) -0 Supply What is one explanation for why this labor supply curve is upward sloping? Unemployment benefits are steadily declining. O People prefer to spend time doing leisure activities rather than working. Firms are willing to hire fewer yoga instructors at a higher wage. The opportunity cost of leisure increases as wages increase. 4arrow_forwardThe following table shows the relationship between the number of workers employed and outputs at Wendy’s Café. Number of Workers Cups of Coffee Produced (per day) 1 50 2 95 3 135 4 170 5 200 6 225 Suppose the market price of each cup of coffee is $20, and the market daily wage for each worker is $800. In order to maximize profit, how many workers should Wendy’s Café employ? Explain and show the steps of your calculations. (b) The following diagram shows the market for medical checkup. What are the equilibrium price and quantity of medical checkup? Which kind of externality problems exists in the market for medical checkup? How does this externality problem affect the efficiency of the market? Explain in detail. How can the government solve this…arrow_forwardIn Miami, 180 people are willing to work an hour as hostesses if the wage is $20 per hour. For each additional $5 that the wage rises above $20, an additional 45 people are willing to work an hour. For wages of $20, $25, $30, $35, and $40 per hour, plot the daily labor supply curve for hostesses on the following graph. WAGE (Dollars per hour) 50 45 40 30 25 20 15 10 135 180 225 270 315 360 405 450 LABOR (Number of workers) Supply ? What is one explanation for why this labor supply curve is upward sloping over the range of wages from low wage to high wage? Unemployment benefits are steadily declining. People prefer to spend time doing leisure activities rather than working. O Firms are willing to hire more hostesses at a lower wage. The opportunity cost of leisure decreases as wages decrease.arrow_forward
- Bob White argues that if his wage went up from $10/hour to $20/hour he would still be able to pay rent and feed his family even if he worked half as many hours. So, if his wage increased he would want to work proportionally less. What is strange about Bob White's labor supply curve? it is very elastic it is very inelastic it slopes down it is verticalarrow_forwardNeed 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_forwardAssume that the firms in the United States set their price as a markup on their wage cost. Assume every firm is identical in the United States, and that they set a wage equal to $22. Recall that the number of employed workers in the United States is 153.5 million. Q 6. Draw the average product of labor on the graph. This value will vary based on how you draw your own graph, but it needs to make sense given the wage. Is the average product of labor greater than, equal to, or less than the wage?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
