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4. Profit maximization Consider Blewitt's Farm, a small blueberry grower relative to the size of the market whose production has no impact on wages and prices. The following table presents Blewitt's production schedule for blueberries: Labor Output (Number of workers) (Pounds of blueberries) 0 0 1 10 19 27 34 40 WAGE (Dollars per worker) Suppose that the market wage for blueberry pickers is $118 per worker per day, and the price of blueberries is $16 per pound. 200 On the following graph, use the blue points (circle symbol) to plot Blewitt's labor demand curve when the output price is $16 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product of for 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. 180 160 140 120 100 80 60 40 20 2 3 0 4 0 5 1 3 LABOR (Number of workers) 2 4 At the given wage and price level, Blewitt's should hire Now Blewitt's should hire 5 Demand P= $16 Demand P $12 Suppose that the price of blueberries decreases to $12 per pound, but the wage rate remains at $118. (?) On the previous graph, use the purple points (diamond symbol) to plot Blewitt's labor demand curve when the output price is $12 per pound. when the output price is $12 per pound. Assuming that all blueberry-producing firms have similar production schedules, a decrease in the price of blueberries will cause the blueberry pickers to

4. Profit maximization Consider Blewitt's Farm, a small blueberry grower relative to the size of the market whose production has no impact on wages and prices. The following table presents Blewitt's production schedule for blueberries: Labor Output (Number of workers) (Pounds of blueberries) 0 0 1 10 19 27 34 40 WAGE (Dollars per worker) Suppose that the market wage for blueberry pickers is $118 per worker per day, and the price of blueberries is $16 per pound. 200 On the following graph, use the blue points (circle symbol) to plot Blewitt's labor demand curve when the output price is $16 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product of for 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. 180 160 140 120 100 80 60 40 20 2 3 0 4 0 5 1 3 LABOR (Number of workers) 2 4 At the given wage and price level, Blewitt's should hire Now Blewitt's should hire 5 Demand P= $16 Demand P $12 Suppose that the price of blueberries decreases to $12 per pound, but the wage rate remains at $118. (?) On the previous graph, use the purple points (diamond symbol) to plot Blewitt's labor demand curve when the output price is $12 per pound. when the output price is $12 per pound. Assuming that all blueberry-producing firms have similar production schedules, a decrease in the price of blueberries will cause the blueberry pickers to

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Economics

4. Profit maximization Consider Blewitt's Farm, a small blueberry grower relative to the size of the market whose production has no impact on wages and prices. The following table presents Blewitt's production schedule for blueberries: Labor Output (Number of workers) (Pounds of blueberries) 0 0 1 10 2 19 3 27 4 34 40 Suppose that the market wage for blueberry pickers is $118 per worker per day, and the price of blueberries is $16 per pound. On the following graph, use the blue points (circle symbol) to plot Blewitt's labor demand curve when the output price is $16 per pound. WAGE (Dollars per worker) Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product of for 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. 200 180 160 140 120 100 80 60 5 40 20 0 LABOR (Number of workers) At the given wage and price level, Blewitt's should hire Demand P = $16 Demand P = $12 Now Blewitt's should hire Suppose that the price of blueberries decreases to $12 per pound, but the wage rate remains at $118. ? On the previous graph, use the purple points (diamond symbol) to plot Blewitt's labor demand curve when the output price is $12 per pound. when the output price is $12 per pound. Assuming that all blueberry-producing firms have similar production schedules, a decrease in the price of blueberries will cause the blueberry pickers to Suppose that wages decrease to $100 due to a decreased demand for workers in this market. Assuming that the price of blueberries remains at $12 per pound Blewitt's will now hire
Transcribed Image Text:4. Profit maximization Consider Blewitt's Farm, a small blueberry grower relative to the size of the market whose production has no impact on wages and prices. The following table presents Blewitt's production schedule for blueberries: Labor Output (Number of workers) (Pounds of blueberries) 0 0 1 10 2 19 3 27 4 34 40 Suppose that the market wage for blueberry pickers is $118 per worker per day, and the price of blueberries is $16 per pound. On the following graph, use the blue points (circle symbol) to plot Blewitt's labor demand curve when the output price is $16 per pound. WAGE (Dollars per worker) Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product of for 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. 200 180 160 140 120 100 80 60 5 40 20 0 LABOR (Number of workers) At the given wage and price level, Blewitt's should hire Demand P = $16 Demand P = $12 Now Blewitt's should hire Suppose that the price of blueberries decreases to $12 per pound, but the wage rate remains at $118. ? On the previous graph, use the purple points (diamond symbol) to plot Blewitt's labor demand curve when the output price is $12 per pound. when the output price is $12 per pound. Assuming that all blueberry-producing firms have similar production schedules, a decrease in the price of blueberries will cause the blueberry pickers to Suppose that wages decrease to $100 due to a decreased demand for workers in this market. Assuming that the price of blueberries remains at $12 per pound Blewitt's will now hire
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