1) A union representing 400 workers faces a Labor demand curve given byw-500-Lwhere Lis the number of workers employed, and w is the weekly wage, measured in dollars. Whatwage rate should the union set to maximize the total wage income of all of its members?b) Now suppose that unemployment benefits of $100 per week become available to thoseworkers who are not hired at the union wage. What wage rate should the union set in orderto maximize total income (including both wage income and unemployment benefits)?

(a) To maximize the total wage income of all union members, we need to find the wage rate that…

Answered: 1) A union representing 400 workers…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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
Fill in the blanks: Workers Employed 0 1 2 3 4 Quantity Produced 0 15 25 33 39 Output Price ($) 10 10 10 10 10 Refer to the above table for a profit-maximizing, competitive firm. If the prevailing wage is $100, then the firm will hire worker(s).
Suppose the market supply is given by L=2.8w. Assume the product market is competitive and the product price is p=$12. Also suppose MPL=8.6-0.8L and that the firm has monopsony power. A.Graph the marginal revenue product of labour. The slope of this curve is equal to The vertical intercept of this curve is equal to .Write the formula for the inverse supply of labour and graph the supply curve. The slope of this supply curve is B. For this firm, the fully simplified formula for marginal cost is MC₁ = __ L (Enter the value which completes the formula. Do not enter the variable, it has been given) Illustrate this market graphically, including accurate numbers for slopes and intercepts. Write the condition which the monopsonist's optimal choice of labour must satisfy. This monopsonist will choose employment level . At this employment level, the firm will offer the wage $ , and the value marginal product of labour is $ The average cost of labour for this monopsonist is $ and the firm's…
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 6 210 300
The Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship between the number of workers Zippy hires and total output: Labor Input (workers per day) Total Output (boxes of paper per day) 0 0 1 15 2 27 3 36 4 43 5 48 6 51 Assuming the selling price is $10 per box, answer the following questions: What is the marginal revenue product (MRP) of each worker? How many workers will Zippy hire if the wage rate is $100 per day? How many workers will Zippy hire if the wage rate is $75 per day? Assume the wage rate is $75 per day and the price of a box of paper is $20. How many workers will Zippy hire?
QUESTION 19 Refer to the following diagram. Wages in both the union and nonunion sectors are initially $10. The union then negotiates a wage rate of $12. The post-negotiation nonunion wage is not yet known. Union $12 $10 S VMP Labor $10 Nonunion VMP Labor The product-market effect would be modeled by shifting the nonunion supply curve to the right, increasing the measured union wage advantage. nonunion demand curve to the right, reducing the measured union wage advantage. Ⓒ union demand curve to the right, increasing the measured union wage advantage. union supply curve to the right, reducing the pure union wage advantage.
How many employees should Martin's farm employ? How many employees should Martin's farm employ if the price he received per gallon of milk rose to $2.50?
Consider a small, remote town with only one employer - a pulp and paper mill. Suppose there are currently 600 workers, each of whom is paid $5000 per month. In order to attract one additional worker, the employer must increase all workers' wage to $5100 per month. What is the marginal cost to the firm of hiring the additional worker? Show transcribed image text . Consider a small, remote town with only one employer - a pulp and paper mill. Suppose there are currently 600 workers, each of whom is paid $5000 per month. In order to attract one additional worker, the employer must increase all workers' wage to $5100 per month. What is the marginal cost to the firm of hiring the additional worker?
Suppose the hourly wage rate is $14, the rental price of capital is $2 and the price of output is constant at $42 per unit. Firm's production technology is q = 4K0.25 0.75, the marginal product of employment is MPE =3K0.25E-0.25 and the marginal product of capital is MPK = K™ 0.75 0.75. What is firm's optimal demand of labor if firm plans to produce q=19 units of outputs in the long-run? (please keep 1 decimal place in your answer)
Macmillan Learning. Since the 1970s the number of jobs in manufacturing has decreased in the United States, while the number of service industry jobs have risen substantially. What possible effect did this change have on union membership in the United States? Union membership decreased because most unions were in manufacturing. Union membership increased because more jobs became available. There was no effect on union membership since total number of jobs was unchanged. O No option is correct.
In San Diego, 135 people are willing to work an hour as cashiers 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 cashiers on the following graph. WAGE (Dollars per hour) 50 45 40 35 30 25 20 15 10 5 0 0 45 90 135 180 225 270 315 LABOR (Number of workers) 360 405 450 -O- Supply (?)
Problem #3: Labor Unions (20 points) Sarah is thinking if she should join the labor union in their company. Her utility function is U (c, 1) = (cl)05, where c denotes consumption, and I denotes leisure. She has 16 hours each day to allocate between work and leisure. 1. Given her non-labor income is zero, how many hours will Sarah work at $7 wage/hour? In addition, how much consumption and leisure can she afford, and how much utility can she achieve from this? 2. If the labor unioh bargains for a $10.5 overtime pay rate for work hours beyond 8 hours, will Sarah benefit from this proposal? 3. If, instead, the labor union proposes an 8-hour workday, will Sarah benefit from it?

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