Assume a firm is a monopsonist that can hire its first worker for $6 but must increase the wage rate by $3 to attract each successive worker (so that the second worker must be paid $9, the third $12, and so on). The marginal revenue product of labor is given in the table below. Marginal Revenue Product Units of Labor 1 $30 2 24 3 18 es 4 15 12 10 a. Draw the firm's labor supply and marginal resource cost curves. Instructions: (1) Use the tool provided 'Ls' to draw the labor supply curve (plot 6 points total). (2) Then use the tool provided 'MRP' to draw the marginal revenue product curve (plot 6 points total). (3) Finally, use the tool provided 'MRC' to draw the marginal resource cost curve (plot 6 points total). To earn full credit for this graph, you must plot all required points for each curve.
Assume a firm is a monopsonist that can hire its first worker for $6 but must increase the wage rate by $3 to attract each successive worker (so that the second worker must be paid $9, the third $12, and so on). The marginal revenue product of labor is given in the table below. Marginal Revenue Product Units of Labor 1 $30 2 24 3 18 es 4 15 12 10 a. Draw the firm's labor supply and marginal resource cost curves. Instructions: (1) Use the tool provided 'Ls' to draw the labor supply curve (plot 6 points total). (2) Then use the tool provided 'MRP' to draw the marginal revenue product curve (plot 6 points total). (3) Finally, use the tool provided 'MRC' to draw the marginal resource cost curve (plot 6 points total). To earn full credit for this graph, you must plot all required points for each curve.
Chapter11: Labor Markets
Section: Chapter Questions
Problem 3SQP
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Transcribed Image Text:Assume a firm is a monopsonist that can hire its first worker for $6 but must increase the wage rate by $3 to attract each successive
worker (so that the second worker must be paid $9, the third $12, and so on). The marginal revenue product of labor is given in the
table below.
Marginal Revenue
Product
Units of Labor
1
$30
24
3
18
es
4
15
12
10
a. Draw the firm's labor supply and marginal resource cost curves.
Instructions: (1) Use the tool provided 'Ls' to draw the labor supply curve (plot 6 points total). (2) Then use the tool provided 'MRP' to
draw the marginal revenue product curve (plot 6 points total). (3) Finally, use the tool provided 'MRC' to draw the marginal resource
cost curve (plot 6 points total). To earn full credit for this graph, you must plot all required points for each curve.
Transcribed Image Text:COst curve (piol 6 poINis lolaI). 10 earm iuii credil Tor his grapri, you nust piol all required points for each curve.
Tools
40
38
36
34
32
30
28
26
24
22
20
18
16
14
12
10
MRP
Ls
MRC
4
1 2 3 4
6.
7
Quantity of labor
Wage rate (dollars)
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