CleanIt is a perfectly competitive, profit-maximizing trash collection firm. CleanIt hires workers in a perfectly competitive labor market. a. Draw side-by-side graphs for the labor market and for CleanIt and show each of the following. i. the market wage, labeled Wm and the quantity of workers hired in the market, labeled Lm ii. the marginal factor (resource) cost curve, labeled MFC iii. the marginal revenue product curve, labeled MRP iv. the wage paid by the firm, labeled Wf and the quantity of workers hired by the firm labeled Lf b. Assume that CleanIt is the only firm in the industry to adopt a new technology. The new technology increases the productivity of CleanIt's workers. i. in the short run, will the wage paid by CleanIt be higher then, lower than, or equal to Wf? Explain. ii. in the short run, will the number of workers hired by CleanIt increase, decrease, or stay the same? Explain. c. CleanIt uses capital in the form of trucks, which it rents for $10,000 each. The marginal product of the last truck used is 100,000 units. If CleanIt is minimizing its costs and the marginal product of the last worker hired is 500 units, calculate the wage. Show your work.
CleanIt is a
a. Draw side-by-side graphs for the labor market and for CleanIt and show each of the following.
i. the market wage, labeled Wm and the quantity of workers hired in the market, labeled Lm
ii. the marginal factor (resource) cost curve, labeled MFC
iii. the marginal revenue product curve, labeled MRP
iv. the wage paid by the firm, labeled Wf and the quantity of workers hired by the firm labeled Lf
b. Assume that CleanIt is the only firm in the industry to adopt a new technology. The new technology increases the productivity of CleanIt's workers.
i. in the short run, will the wage paid by CleanIt be higher then, lower than, or equal to Wf? Explain.
ii. in the short run, will the number of workers hired by CleanIt increase, decrease, or stay the same? Explain.
c. CleanIt uses capital in the form of trucks, which it rents for $10,000 each. The marginal product of the last truck used is 100,000 units. If CleanIt is minimizing its costs and the marginal product of the last worker hired is 500 units, calculate the wage. Show your work.
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