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)

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)

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter19: Labor And Entrepreneurship: The Human Inputs

Section: Chapter Questions

Problem 1DQ

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What determines the demand for labor for a firm with market power in the output market?
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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 :
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Wage Kal 0 2 Multiple Choice O O 3 Quantity of Workers 3 2 6 4 5 S3 4 Refer to the graph, which shows the supply and demand for unionized manufacturing workers. The initial equilibrium point is point 1. The wages paid in comparable nonunion occupations Increase significantly, while at the same time the price of manufactured goods decreases. Which point would represent the new equilibrium? 51 D3 D₁ 52 D2
Demand 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?