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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Historians have been able to find out how the relationship between wage levels and capital costs developed in England and France from the early 1600s until the first part of the 1800s. What does not characterize this development? Wage levels relative to capital costs fell in the early 1600s in France and never rebounded to the same level in the period up to 1820 O After about 1700, England experienced a long period of steadily higher wages relative to capital costs. O Since the two countries are so close to each other, the development is exactly the same in the two countries. Compared to France, labour in England was much more expensive relative to capital at the start of the Industrial Revolution.
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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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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 =…
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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: $ ___
Given: Assume a firm is attempting to minimize cost by selecting units of capital and units of labor in order to produce an output level at least as large as some specified output quota. Cost-minimizing choices are provided in the following table for a baseline scenario and new scenario. Baseline New Wage rate $50 $50 $50 Rental rate $50 Output quota 66 99 Units of labor employed 44 66 Units of capital employed 44 66 Using the table, how did the new event affect the firm's total cost? O Total cost remained unchanged. O Total cost decreased. O Total cost increased. O Cannot be determined.
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