3 1.1.Let a firm be in a perfectly competitive output market with the following data aboutproduction.Quantity of Workers Marginal Product of Labor10801175127013661459154816401736183119251.1.a. Given that the industry is perfectly competitive, let us suppose that the price of the output is fixedat 90 pesos. If the labor market is also perfectly competitive and the wage of the worker is fixed at5000, is it better for the firm to hire more or less than 15 workers? Explain briefly.1.1.b. Suppose that the price of the output went up from 90 pesos to 140 pesos. The wage of theworker is still the same at 5000. Based on the table and your new calculation, how many workersshould the firm hire? Explain briefly.For question 1.1.b.

A perfectly competitive market is an ideal sort of market structure where all producers and…

Answered: 1.1. Let a firm be in a perfectly…

1.1. Let a firm be in a perfectly competitive output market with the following data abou production. Quantity of Workers Marginal Product of Labor 10 80 11 75 12 70

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter16: Labor Markets

Section: Chapter Questions

Problem 16.6P

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I just what to know how they found MC
A firm can use three different production technologies, with capital and labour requirements at each level of output as follows:Daily OutputTechnology 1 Technology 2 Technology 3K L K L K L100 3 7 4 5 5 4150 3 10 4 7 5 5200 4 11 5 8 6 6250 5 13 6 10 7 8a) Suppose the firm is operating in a high-wage country, where capital cost is $100 per unit per day and labour cost is $80 per worker per day. For each level of output, which technology is the cheapest?b) Now suppose the firm is operating in a low-wage country, where capital cost is $100 per unit per day and labour cost is $40 per worker per day. For each level of output, which technology is the cheapest?c) Suppose the firm moves from a high-wage to a low-wage country but that its level of output remains constant at 200 units per day. How will its total employment change?
A firm uses both labor and machines in production. Explain why an increase in the average wage rate causes both a movement along the demand curve and a shift of the demand curve. An increase in the average wage causes a movement O A. up the labor demand curve because the wage becomes greater than the marginal cost of labor. O B. down the labor demand curve because the wage becomes greater than the marginal revenue product of labor. O C. up the labor demand curve because the marginal cost of labor becomes greater than the marginal revenue from an additional unit of output. O D. up the labor demand curve because the marginal cost of labor becomes greater than the marginal revenue product of labor. O E. down the labor demand curve because the marginal cost of labor becomes greater than the marginal product of labor.
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E1 3. [Employment and Unemployment] Suppose a country has a working-age population of 500people. The demand and supply functions of its labor market are:w=300-0.5L w=60+0.1Lwhere w is the wage, L is the quantity of labor. The labor market has search friction so thatthose that are looking for a job may not immediately find one even when there are openings.Specifically, Assume the number of job matches (i.e. employment) is given by: 0.8L(a) Find the equilibrium wage and the actual number of employed people. Calculate thelabor force participation rate and unemployment rate. (b) The COVID-19 pandemic lowers the labor demand, and the new labor demand becomesw=240-0.5L. Assume that the wage can adjust quickly, find the equilibrium wage and theactual number of employed people during the pandemic. (c) Briefly explain in words, and with a specific example of each, the difference betweenstructural and frictional unemployment.
A firm spends 1.000 pesos regardless of how much output is produced. Evry worker hired by the firm receives a wage of 1,200 pesos. We also know that: L TP AP MP TFC TVC TC AFC AVC AC MC 0 0 1 50 2 104 3 162 4 224 5 282 6 336 7 386 8 432 9 474 10 512 11 546 12 576 13 602 14 624 15 640 Where L =…
Gopher Excavators produces shovels in a small factory and sells the shovels in a competitive market. The following table shows the company's production function: Labor Output (Shovels) (Number of workers) 0 0 1 100 2 195 3 275 4 340 5 380 Use the blue points (circle symbol) to plot the production function for Gopher Excavators on the following graph. (?) 400 O -O- 360 Production Function 320 280 240 200 160 120 80 40 0 O 0 2 2 5 LABOR (Number of workers) Calculate the marginal product of labor (MPL) of each worker, and then plot the MPL curve on the following graph using the blue points (circle symbol). Note: Remember to plot each point halfway between two integers. For example, when the number of workers increases from 0 to 1, the MPL of the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically connect the points. ? 100 90 80 70 60 50 40 30 20 OUTPUT (Shovels) MPL (Shovels per worker) 10 0 0 O 1 1 2…
b. The programmers in this town are going to work at one of these two places for sure: Their labor supply is vertical, or in other words, perfectly inelastic, with supply equal to 100. So, what will the equilibrium wage be? Just as in Figure 18.1, the numbers may not work out exactly, so use your judgment to come up with a good answer. Equilibrium wage: $ ___
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