Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 3, Problem 5NP
(a)
To determine
Effect of lump sum tax on amount of labor supplied.
(b)
To determine
Equilibrium values of employment and real wage.
(c)
To determine
Equilibrium values of employment and real wage after imposition of minimum wage legislation.
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Students have asked these similar questions
Suppose that the production of a certain product only requires one input, labor, and that the additional production diminishes by half after the last input.
On the other hand, the demand of the good can be described using the equation
Q = 10000 – P/10.
The total product of the second unit of labor is 3,000 unite. Finally, each additional worker requires P1,000,000. Given the following information, answer
the following questions:
What is the marginal revenue product of the third unit of labor?
Answer: 500
How would you characterize the marginal revenue product of labor?
How would you characterize the labor market that this firm faces?
When deriving labour supply, we assumed that the substitution effect dominated the income effect. What impact would there be on labour supply if this was not the case? Briefly investigate how such a change could theoretically affect the imposition of a minimum wage. (Your answer is likely to benefit if it is supported by a diagram.)
Based on this model, households earn income when
firms
purchase
factors
in factor markets.
Suppose Hilary earns $725 per week working as an analyst for A-Plus Accountants. She uses $10 to buy a box of aspirin at Pillmart Pharmacy. Pillmart
Pharmacy pays Edison $250 per week to work the cash register. Edison uses $350 to purchase tax services from A-Plus Accountants.
Identify whether each of the following events in this scenario occurs in the factor market or the product market.
Event
Factor Market
Product Market
Edison spends $350 to purchase tax services from A-Plus Accountants.
Hilary earns $725 per week working for A-Plus Accountants.
Chapter 3 Solutions
Macroeconomics
Ch. 3 - Prob. 1RQCh. 3 - Prob. 2RQCh. 3 - Prob. 3RQCh. 3 - Prob. 4RQCh. 3 - Prob. 5RQCh. 3 - Prob. 6RQCh. 3 - Prob. 7RQCh. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQ
Ch. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 14RQCh. 3 - Prob. 15RQCh. 3 - Prob. 1NPCh. 3 - Prob. 2NPCh. 3 - Prob. 3NPCh. 3 - Prob. 4NPCh. 3 - Prob. 5NPCh. 3 - Prob. 6NPCh. 3 - Prob. 7NPCh. 3 - Prob. 8NPCh. 3 - Prob. 9NPCh. 3 - Prob. 10NPCh. 3 - Prob. 1APCh. 3 - Prob. 2APCh. 3 - Prob. 3APCh. 3 - Prob. 4APCh. 3 - Prob. 5APCh. 3 - Prob. 6APCh. 3 - Prob. 7AP
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