Consider a perfectly competitive labor market in which the demand for labor is given by E = 30,000-(2,000/3)W, and the supply oflabor is given by E -8,000+2,000W. In these equations, E is the number of employee-hours per day, and W is the hourly wage.a. What is the equilibrium number of employee-hours each day?Instructions: Enter your response as a whole number.employee-hours each dayIn equilibrium, what was the dollar value of the additional output generated by the last employee-hour hired in the market?Instructions: Enter your response rounded to the nearest penny (two decimal places).$b. Suppose the government imposes a minimum wage of $24 per hour. What will be the resulting number of employee-hours after theimposition of this minimum wage?Instructions: Enter your response as a whole number.employee-hours each dayThe minimum wage will (Click to select) workers' total earnings and will (Click to select) total economic surplus.

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Answered: Consider a perfectly competitive labor…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Look at the graph below. Labor demand falls from D0 to D1 due to an economic recession. What is the resulting wage in the short-run due to this shift in demand? HINT: Consider whether this is a situation in which the wages are sticky or flexible. Wage Rate 40 35 30 25 20 15 10 5 0 5 10 15 20 25 30 Quantity of Labor D1 35 40 DO
The marginal product of labor for a firm is given by: MPL = 112 - 4H, where H is the number of hours they hire workers to work. For example, the marginal product of the first hour of labor would be 112 - 4*1, and the marginal product of the second hour of labor would be 112 - 4*2. If the market wage is $16 per hour, how many hours of labor will this firm hire? Round your final answer to two decimal places.
1. Consider a static labour supply model for an individual. Assume that the person works a positive number of hours. Assume that the utility function is of the following form: U=x0.5 +8(T-h)(0.5) where x is consumption and his hours of work, and 8 is a parameter of the utility function. The person is paid a wage of w for each hour worked. The person has no other source of income other than employment earnings. Assume that the price of x equals 1. a) Specify the utility maximization problem, write down the Lagrange function, and solve for the first order conditions. b) Solve for the MRS condition between consumption and hours of work. c) Assume that 8=2 if the person has a child living at home, and 8=1 otherwise. Explain (and either show mathematically or graphically) how this will affect the optimal number of hours of work of the person.
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Demand for Resources A small manufacturing company has the following daily relationship between labor and output: Units of Total Labor Product 1 2 21 3 35 52 61 65 61 7 If the firm sells into a perfectly competitive market and the equilibrium price is $3.25 per unit, compute the following: Marginal Units of Marginal Product Revenue Labor Product 1 2 3 5 7 How many workers will the firm hire is the market wage rate (includining benefits) is $30.00? Wł 3 How many workers will the firm hire is the market wage rate(includining benefits) is $20.00? 4 If the equilibrium price per unit of output dencreases, what would you expect to happen to the number of workers hired? If the firm sells in a imperfectly competitive market such that price per unit starts at $4.50 per ur declines by $0.10 per unit as more as sold, what do you think would happen to the number of labor units hired at $30.00 per unit? 5 2.
Suppose the hourly wage rate is $14, the rental price of capital is $2 and the price of output is constant at $42 per unit. Firm's production technology is q = 4K0.25 0.75, the marginal product of employment is MPE =3K0.25E-0.25 and the marginal product of capital is MPK = K™ 0.75 0.75. What is firm's optimal demand of labor if firm plans to produce q=19 units of outputs in the long-run? (please keep 1 decimal place in your answer)
How does the addition error occur when obtaining the market labor demand curve? What to do to avoid this? Explain with the help of the figure.
Consider the Labor Economics Question. This will provide insight into the idea of the optimal number of workers and the value of the marginal product of labor. If wages in the restaurant is $20.00 per hour and the price of a Hamburger is $8.00 and the production function for the workers is: Q = 11L – 0.25L^2 a. How many workers should Your Restaurant employ during the lunch hour to maximize profits? 1 Point (note—the value of the marginal product of labor and the marginal revenue product are the same) We maximize profits which are total revenues less total costs: b. Compute the maximum profit at Your Restaurant. (note—consider that profit involves Total Revenue and Total Costs). 1 Point c. Compute the profit created if You hire an additional worker. Explain why it is or is not profit maximizing to hire an additional worker. The idea of this question is to recognize that we can find the profit maximizing quantity of labor– after that point, profit begins to…
1. Suppose a short-run production function is described as Q40L 0.04L2 where L is the number of labors used each hour.
Consider the Labor Economics Question. This will provide insight into the idea of the optimal number of workers and the value of the marginal product of labor. If wages in the restaurant is $16.80 per hour and the price of a Hamburger is $8.30 and the production function for the workers is: Q = 11L – 0.25L2 How many workers should Your Restaurant employ during the lunch hour to maximize profits? 1 Point (note—the value of the marginal product of labor and the marginal revenue product are the same) We maximize profits which are total revenues less total costs:
1. Assume the quantity of envelopes licked per hour by Sticky Gums, Inc., is where L is the number of laborers hired per hour by the firm. Assume further that the envelope licking business is perfectly competitive with a market price of 1 cent per envelope. A. How much labor would be hired at a competitive wage of $10? What about $5? $2? Use these results to sketch a demand curve for labor. B. Assume that Sticky Gums hires its labor at an hourly wage of $10 what quantity of envelopes will be licked when the price of a licked envelope is 2 cents? What about 5 cents? 10 cents? Use your results to sketch a supply curve for licked envelopes.
The marginal product of labor for a firm is given by: MPL = 112 - 3H, where H is the number of hours they hire workers to work. For example, the marginal product of the first hour of labor would be 112 - 3*1, and the marginal product of the second hour of labor would be 112 - 3*2, and so on. If the market wage is $18 per hour, how many hours of labor will this firm hire? Round your final answer to two decimal places.

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