LABOR ECONOMICS
8th Edition
ISBN: 9781260004724
Author: BORJAS
Publisher: RENT MCG
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Question
Chapter 4, Problem 12P
a)
To determine
The number of workers hired by the monopsony firm and the corresponding wage rate.
b)
To determine
The number of workers hired by the firm with a minimum wage rate of $25.
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Consider a monopsonist that hires 4.28 units of labor at a wage of 19.26. If the marginal value placed on the last worker hired is 41.22
a.) what is the elasticity of labor supply for this monopsonist?
The inverse labour demand curve of a monopsonist employer is W = 38,500 – 112L, where W is the annual salary and L is the number of workers hired. The labor supply is given by W = 10,700 + 100L.
(a) The marginal expenditure equation is ME= . Do not include a comma in your answer. Please use capital letters (e.g. L not l)
(b) To the nearest integer, the monopsonist would hire workers and, given that number of workers, the salary they would pay is, rounded to 2 decimal places (e.g. 4.12) . Do not include a comma in your answer.
A monopsonist's demand for labor can be written as VMPE = 40 – 0.005ED. Labor is supplied to the firm according to w = 5 + 0.01ES. Thus, the firm's marginal cost of hiring workers when it hires off of this supply schedule is MCE = 5 + 0.02ES.
A. How much labor does the monopsony firm hire and at what wage when there is no minimum wage?
B. How much labor does the monopsony firm hire and at what wage when it must pay a minimum wage of $25?
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- The inverse labour demand curve of a monopsonist employer is W= 37,500 – 80L, where Wis the annual salary and Lis the number of workers hired. The labor supply is given by W= 9,400 + 108L. (a) The marginal expenditure equation is ME= Do not include a comma in your answer. Please use capital letters (e.g. L not I) (b) To the nearest integer, the monopsonist would hire 数字 workers and, given that number of workers, the salary they would pay is, rounded to 2 decimal places (e.g. 4.12) A7 Do not include a comma in your answer.arrow_forward3. A monopsonist's inverse demand for labor can be written as D-1(w) = VMP(E) 0.005ED. Labor is supplied to the firm according to the inverse supply function S-(w) s(E) = w = 5+0.01E,. = 40 – (a) Assume that it is a short-run problem and state the monopsonist's PMAX problem mathematically. (b) Define the monopsonist's cost and find the marginal cost. (c) How much labor does the monopsony firm hire? At what wage rate does it hire workers? (d) How much labor would the monopsonist approximately hire if it hired as if a perfectly competitive firm does? At what wage rate would it hire workers approximately? (e) Draw a graph. (f) Approximately calculate producer surplus (PS), worker surplus (WS), and dead weight loss (DWS) for (Emono: Wimono) and (E*, w*). State the implication of this exercise. (g) How much labor does the monopsony firm hire and at what wage when it must pay when it must pay a minimum wage of $25? State the implication of this exercise.arrow_forwardThe monopsonist will hire 50 units of labor at a wage rate of w = L = 50. In comparison to a perfectly competitive employer who hires 50 units of labor at a wage rate of 100, the monopsonist hires half the quantity of labor at half the wage rate. Hence, the statement is true.arrow_forward
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