9. Calculating the price elasticity of supplyDmitri is a university student who lives in Vancouver and teaches tennis lessons for extra cash. At a wage of $50 per hour, he is willing to teach 7hours per week. At $65 per hour, he is willing to teach 10 hours per week.Using the midpoint method, the elasticity of Dmitri's labour supply between the wages of $50 and $65 per hour is approximately, which meansthat Dmitri's supply of labour within this wage range is

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Answered: Dmitri is a university student who…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You are a labor economist trying to evaluate whether the labor market for computer scientists is competitive or monopsonistic. Based on previous research, you know that the production function for computers depends only on labor input: Y = -0.5L^2 + 10L; where Y is the output of computers and L is the quantity of labor used. The price of a computer is p = 2. You also know that the labor supply, as a function of the wage, for computer scientists is the following, where w is the wage per unit of labor: L = -10 + w. a. Find the equilibrium wages and employment (wc; Lc) that would prevail if the market for computer scientists were competitive. [Remember that a competitive firm takes the wage as given : that is, it assumes that the quantity of workers that it hires has no effect on the price of the next worker. (Of course, the equilibrium wage must equate demand and supply)].
Suppose a coal mine's workers can dig two tons of coal per hour and coal sells for $15 per ton. If the coal mine is the only hirer of miners in a local area and faces a labor supply curve of the form: l = 50w. What is the equilibrium level of employment? What is the wage paid to minors?
The inverse labour demand curve of a monopsonist employer is W = 38,500 – 112L, where W is the annual salary and L is the number of workers hired. The labor supply is given by W = 10,700 + 100L. (a) The marginal expenditure equation is ME= . Do not include a comma in your answer. Please use capital letters (e.g. L not l) (b) To the nearest integer, the monopsonist would hire workers and, given that number of workers, the salary they would pay is, rounded to 2 decimal places (e.g. 4.12) . Do not include a comma in your answer.
1. Computing labor productivity and its relationship to the demandfor labor Sizzler's produces charcoal grills in a small manufacturing facility and sells the grills in a competitive market. The following table presents the company's production function: Labor (Number of workers) 0 OUTPUT (Grills) 400 360 320 280 Use the blue points (circle symbol) to plot the production function for Sizzler's on the following graph. 240 200 160 120 80 40 0 1 0 2 3 4 5 1 Output (Grills) 0 95 185 260 320 355 2 3 LABOR (Number of workers) 4 5 Production Function (?) Calculate the marginal product of labor (MPL) of each worker, and then plot the MPL curve on the following graph using the blue points (circle symbol).
Solving for the equilibrium wage and quantity is a multi-step procedure. First, you will need the marginal resource cost (MRC) curve. This curve gives the marginal cost of hiring an additional nurse (in cost per hour). Since attracting an additional nurse requires raising the wage rate for all nurses, this cost is above the wage rate required for that additional nurse. If the inverse supply curve is given as W = a + bQs, the marginal resource cost is: MRC = a + 2bQs Essentially, it has the same y-axis intercept as the inverse supply curve, but twice the slope. With a single buyer there isn’t a demand curve, but what we would think of the demand curve is the marginal value curve. In this case, it gives the marginal value product (in dollars per hour) of nurses. Hence, you can replace W in the inverse demand function with MVP. To find the quantity of nurses hired, set MRC = MVP and solve: Q. 6. With a monopsony, how many nurses are hired?
Paolo is a college student who lives in Chicago and provides math tutoring for extra cash. At a wage of $50 per hour, he is willing to tutor 7 hours per week. At $65 per hour, he is willing to tutor 10 hours per week. Using the midpoint method, the elasticity of Paolo’s labor supply between the wages of $50 and $65 per hour is approximately ........................(0.09/0.74/1.35/42.5), which means that Paolo’s supply of labor over this wage range is ..........................(elastic/inelastic).
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In a purely competitive labor market (a), market labor supply S and market labor demand D determine the equilibrium wage rate Wc and the equilibrium number of workers Qc . Each individual competitive firm (b) takes this competitive wage Wc as given. Thus, the individual firm’s labor supply curve s = MRC is perfectly elastic at the going wage Wc . Its labor demand curve, d, is its MRP curve (here labeled mrp). The firm maximizes its profit by hiring workers up to where MRP = MRC. Area 0abc represents both the firm’s total revenue and its total cost. The green area is its total wage cost; the blue area is its nonlabor costs, including a normal profit—that is, the firm’s payments to the suppliers of land, capital, and entrepreneurship. A rightward shift of the labor supply curve in graph (a) would shift curve: a. d = mrp leftward in graph (b). b. d = mrp rightward in graph (b). c. s = MRC upward in graph (b). d. s = MRC downward in graph (b).
In a purely competitive labor market (a), market labor supply S and market labor demand D determine the equilibrium wage rate Wc and the equilibrium number of workers Qc . Each individual competitive firm (b) takes this competitive wage Wc as given. Thus, the individual firm’s labor supply curve s = MRC is perfectly elastic at the going wage Wc . Its labor demand curve, d, is its MRP curve (here labeled mrp). The firm maximizes its profit by hiring workers up to where MRP = MRC. Area 0abc represents both the firm’s total revenue and its total cost. The green area is its total wage cost; the blue area is its nonlabor costs, including a normal profit—that is, the firm’s payments to the suppliers of land, capital, and entrepreneurship. This firm’s labor demand curve d in graph (b) slopes downward because: a. the law of diminishing marginal utility applies. b. the law of diminishing returns applies. c. the firm must lower its price to sell additional units of its product. d. the firm is a…
Suppose that a firm is producing in the short run with output given by: Q = 55L-L² The firm hires labor at a wage of $45 per hour and sells the good in a competitive market at P = $14 per unit. Find the firm's optimal use of labor. Enter as a value. ROUND TO THE NEAREST WHOLE NUMBER.
Jane is the General Manager at a new café and wants to hire a few baristas. The going rate for baristas is $15 per hour. Jane has heard that many of the local coffee shops have high turnover with baristas “ghosting” them – simply not showing up for their shifts and never coming back. Jane starts to put together an advertisement to hire baristas for $15 per hour, but changes her mind and lists the wages she will pay at $20 per hour. Why would Jane pay $15 per hour? What’s her rationale for paying $20 (or any wage higher than $15)?
Candice’s’ Cookies is a new cookie delivery company in Gainesville, Florida. The firm hires local college students to sell cookies door-to-door in higher income neighborhoods. Each of these “Sales Associates” sells cookies, which increases Candice’s Cookies’ total revenue, but must be paid an hourly wage. The graph below depicts Candice’s Cookies’ demand for labor curve when the retail price of a cookie is $2. Show Transcribed Text Part (i): Suppose that the retail price of a cookie is $2.50. What is the marginal product of the 4th Sales Associate? 1 cookie 2 cookies 3 cookies 4 cookies 5 cookies Part (ii): Suppose that the retail price of a cookie is $2.50. What is the marginal product of the 6th Sales Associate? 1 cookie 2 cookies 3 cookies 4 cookies 5 cookies Part (iii): Suppose that the retail price of a cookie is $2. What is the marginal product of the 8th Sales Associate? 1 cookie 2 cookies 3 cookies 4 cookies 5 cookies

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