Figure 19-7 Wage 30 $2 27 24 21 18 15 12 DI 200 400 600 800 labor Refer to Figure 19-7. The figure shows labor demand and labor supply in a non-unionized labor market. Suppose the current labor demand is D1 and the current labor supply is S1. If a firm in this market decided to pay its workers $18 per hour to increase the productivity of its workers, this firm would be paying a(n)
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- What determines the demand for labor for a firm with market power in the output market?What determines the demand for labor for a firm operation in a perfectly competitive out market?The following table provides information about labor supply and the marginal revenue product of labor for a profit-maximizing monopsonist. Marginal Revenue Wage Labor Supply Product of Labor 4567∞ a 18 36 19 33 20 30 21 27 8 22 24 9 23 21 10 13 223 24 18 11 25 15 12 26 12 27 9 14 28 6 15 29 3 Calculate the marginal cost of labor at each level of employment. What is the marginal cost of hiring the 25th worker?
- Suppose the union’s resistance curve is summarized by the following data. The union’s initial wage demand is $10 per hour. If a strike occurs, the wage demands change as follows:Length of Strike: Hourly Wage Demanded1 month $92 months 83 months 74 months 65 or more months 5Consider the following changes to the union resistance curve and state whether the proposed change makes a strike more likely to occur, and whether, if a strike occurs, it is a longer strike.a. The drop in the wage demand from $10 to $5 per hour occurs within the span of two months, as opposed to five months.b. The union is willing to moderate its wage demands further after the strike has lasted for six months. In particular, the wage demand keeps dropping to $4 in the sixth…Suppose that there are two sectors in the economy : a unionized and a non - unionized one . The labor demand function in each sector is L = 500,000-25w . There are 500,000 people avail able to supply their labor and their decision doesn't depend on the wage . People in both sec tors are equally skilled and experienced for the job in either sector . Assume that the union sets a wage at the rate of $ 15,000 in the union sector . Hint : for these questions below , use posted textbook solutions file for the end - of - the chapter 10 exercises . 6a). Suppose that each sector decides to hire 50 % of the people available to work and supplying their labor . Calculate what the competitive market wage would be in this case . Show your calcu lations . Answer : 6b) . Calculate how many people will the unionized sector be able to employ at most . Show your calculations . Answer :The table below shows the quantity demanded and supplied in the labor market for economics professors at I'mAStateUniversity, where all the professors belong to a union. All of the economics professors could also work as economic consultants, but the market for economic consultants is not unionized. Annual Salary Quantity of workers demanded Quantity of workers supplied $50,000 95 20 $60,000 80 30 $70,000 65 40 $80,000 50 50 $90,000 35 60 $100,000 20 70 If the union negotiates an annual salary increase for economics professors that is $20,000 higher than the market wage rate for economic consultants, then the market wage rate for the consulting positions will _____________________ and the quantity of economic consultants employed will_____________________. Question 3 options: rise, rise rise, fall fall, rise fall, fall
- Unit of Labor 0 1 2 3 4 5 5 4 6 3 2 Total Product 0 15 28 39 48 55 60 Refer to the table, which gives data for a firm that is hiring labor in a purely competitive market. If the wage rate is $20, how many workers will the firm choose to employ? Product Price $ 2.20 2.00 1.80 1.60 1.40 1.20 1.10 5 5 dy enThe demand for unionized labor will generally be more elastic, and it will be more difficult for the union to achieve above-equilibrium wages, when: O there are few close substitutes for the unionized workers. O trade barriers limit the importation of the product produced by the unionized workers. O the cost of employing the unionized workers is a small part of the total cost of product that they produce. the demand for the product produced by the unionized workers is relatively price elastic. A strike, or the threat of one, is most likely to be effective when: O demand for the firm's product is weak. O foreign competition for the product is high. O the firm has a low product inventory. O demand for the product produced by the union workers is highly elastic.10 What wage would the union choose if it behaved as a `monopoly union"? What amount of employment would the firm choose in response? Is this outcome on the contract curve? 8 7 Answer: 6 По 5 4 TT Submit Answer 3 2 TT2 1 MRPL 1 3 6 7 8 9. 10 Name an outcome which is a Pareto improvement over the monopoly union outcome. Name an outcome which is Pareto efficient. Answer: If the alternative wage is $3, is this union maximizing the wage bill or economic rent? Answer: Submit Answer Submit Answer Suppose the alternative wage is $7 and the firm and union bargain within a right-to-manage framework. Is the union's preferred outcome within the bargaining range? Answer: Submit Answer
- A. Name the unnamed curves in Diagram #1(competitive employer (buyer of labor) & competitive labor market) one firm's (MRP ARP, w, MFCuer Market for labor 1. Average Revenue Product of labor curve (where ARP- TR+ Qu) S170/persen 2. Marginal Income of labor to Union curve S 120/person S100person HMRP S70/person B. Using the diagram # 1: determine the following in the Market Diabor 30 120kDemand and Supply of Labor by Firm A Output MPL MRPL Scenario 1 Scenario 2 No. of Workers MR=20 W = ME W ME 0 0 - - - 1 20 20 400 400 250 250 2 50 30 600 400 300 350 3 75 25 500 400 350 450 4 95 20 400 400 400 550 5 110 15 300 400 450 650 6 120 10 200 400 500 750 1. In wage scenario 2 Firm A is a? perfectly competitive buyer of labor monopsonistic buyer of labor 2. In wage scenario 2, How many workers should Firm A hire to maximize its profits. 3. In wage scenario 1, if government imposes a minimum wage of 500 per worker, how many workers will the firm A?23. Question 23 is based on the below-mentioned diagram illustrates a monopsony outcome. The monopsony firm MRP = marginal revenue product, MFC = marginal factor cost and the wage is determined by the labour supply curve at this level of output. In the absence of a union the monopsony firm hires Lm workers and pays them Wm. MFC wage Wu Wm Lm S O a. hire less than Lm workers. Ob. hire a maximum of Lm workers. Ochire greater than Lm workers. Od. None of the above. MRP Quantity of labor Suppose the union and firm negotiates a wage above Wu, the firm will A