4. Inclusive, or industrial, unions - Negotiating a higher industry wageConsider the housing construction industry. Assume that the industry is perfectly competitive in both input and output markets. Suppose that, throughcollective bargaining, a labor union negotiates an industry-wide wage for various kinds of labor (electricians, plumbers, and so on). In particular, itsucceeds in negotiating a wage increase for carpenters from $15 to $20 per hour.The following graph shows the labor demand of an individual firm.On the following graph, show what happens at the firm level as a result of the union negotiations.(?3025DemandSupplySupply1510Demand5122436486072QUANTITY OF LABORWAGE RATE20 Now consider the effects of the wage change on the entire industry.Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.Graph Input Tool?)30I Wage Rate(Dollars per hour)1525SupplyQuantityDemanded(Thousands ofworkers)Quantity Supplied(Thousands ofworkers)363620Excess Supply(Thousands ofworkers)Shortage(Thousands ofworkers)1510DemandDemand ShifterPro-unionAdvertising(Millions of dollars)122436486072QUANTITY OF LABOR (Thousands of workers)The union's wage increase from $15 to $20 per hour causes an excess supply ofworkers. (Note: Be sure to enter your answer inthousands of workers.)Suppose that the union, in order to mitigate the unemployment caused by the wage increase, bolsters demand by rolling out a "Buy Union"advertising campaign. If the union spends $5 million on the campaign, the excess supply of labor will beworkers. (Note: Be sure toenter your answer in thousands of workers.)WAGE RATE (Dollars per hour)

Answer: (1). The following graph shows the impact of wage increase from $15 to $20 per hour on the…

4. Inclusive, or industrial, unions - Negotiating a higher industry wage Consider the housing construction industry. Assume that the industry is perfectly competitive in both input and output markets. Suppose that, through collective bargaining, a labor union negotiates an industry-wide wage for various kinds of labor (electricians, plumbers, and so on). In particular, it succeeds in negotiating a wage increase for carpenters from $15 to $20 per hour. The following graph shows the labor demand of an individual firm. On the following graph, show what happens at the firm level as a result of the union negotiations. (? 30 25 Demand 20 Supply Supply 10 Demand 12 24 36 48 60 72 QUANTITY OF LABOR WAGE RATE

4. Inclusive, or industrial, unions - Negotiating a higher industry wage Consider the housing construction industry. Assume that the industry is perfectly competitive in both input and output markets. Suppose that, through collective bargaining, a labor union negotiates an industry-wide wage for various kinds of labor (electricians, plumbers, and so on). In particular, it succeeds in negotiating a wage increase for carpenters from $15 to $20 per hour. The following graph shows the labor demand of an individual firm. On the following graph, show what happens at the firm level as a result of the union negotiations. (? 30 25 Demand 20 Supply Supply 10 Demand 12 24 36 48 60 72 QUANTITY OF LABOR WAGE RATE

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. Consider a firm in a perfectly competitive industry that must decide how much labor to hire (in the short run, i.e., in the background the capital is fixed). The firm’s marginal product of labor is 110-5L. It takes as given an output price P = 2, and the wage = 20. a. Please calculate the optimal quantity of labor for this firm to hire within this setting. b. Would a monopsonist employer in this same situation hire more or less labor? Why? c. Discuss a possible basis for state regulations of employment within 'company towns'.
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Use 2-diagrams, one for unionized and the other for non-unionized sector where both markets are initially in equilibrium. Assume that despite an increase in wages in unionized sector, the employment level is fixed in the unionized sector at the initial competitive equilibrium level. What would be the impact of an increase in wages on both sectors in this case? Explain
Refer to the following table Labor Output Price 0 0 1 16 $7 2 31 $7 3 45 $7 4 58 $7 5 69 $7 6 78 $7 Assume that the labor market is perfectly competitive. Suppose the price of the good is $7. If the wage rate is $65, the firm will achieve maximum profit by hiring ________ workers. Choose correct answer: a. 5 b. 6 c. 4 d. 3
6. Monopsony basics Consider a newspaper in a small town that has monopsony power in hiring journalists. The following table shows the labor hours that will be supplied at each of the given hourly wages, as well as the total cost of labor at each quantity of labor. Suppose the newspaper's demand for labor as a function MVP of the marginal value product of labor (MVPL) is given by L= 5.5- 20 Compute the marginal expense (MEL) and marginal value product (MVPL) of adding an additional hour at each quantity and enter the values into the following table. Hourly Wage WAGE (Dollars per hour) 90 80 60 10 100 40 20 30 20 40 70 10 50 0 30 The following graph depicts the supply of labor in this market. Labor Supplied (Hours) Use the grey points (star symbol) to plot the marginal expense at the five quantities of labor given in the previous table. Then use the blue points (circle symbol) to plot the firm's demand for labor as a function of the MVPL- 0 1 1 2 2 3 3 4 5 Total Labor Cost (Dollars per…
Firms that are confronted with union demands for higher wages may choose production methods that involve and less , resulting in increased labor productivity. more Select the correct answer below: labor; resources O physical capital; labor O raw materials; physical capital labor; physical capital
4 A production function is states as: 120Q1/3, with an output price of 25. Firms total revenue is stated as 11000Q1/2 with a labor supply of Q=15w. If you derive the monopsony equilibrium labor and monopsony wage what would they be.
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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.
10. Assuming a player is not part of a union, the player is better off if the goods market is and the labor market is A) competitive; a monopsony. C) a monopoly; competitive. B) competitive; competitive. D) a monopoly; a monopsony.