ECON 122: Short Writing Assignment #3Suppose there are two different labor markets, A and B, each with identical demand for labor curves. Ifthe Supply curves are also identical, draw a graph of each labor market in the space below:Now, assume that Market A's working conditions - for some reason - become much harsher than thatfor Market B (perhaps they are more dangerous or unhealthy). Illustrate how this development wouldimpact your graph(s) above.What impact would this have on the wages in Market A relative to Market B? How about on totalemployment in each market? Why?

The objective of the question is to understand the impact of changes in working conditions on labor…

Answered: ECON 122: Short Writing Assignment #3…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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1) Suppose the prdduction function for widgets is given by: q= KL – 0.8K² – 0.2L?. a.) Suppose K=10, at what level of labor input does this AP1,reach a maximum and how many widgets are pIdduced at that point? At what level of labor input does MP1=0 and how many widgets are produced at that point? Graph the TP1, AP1 and MP1 curves. b.) Suppose capital inputs were increased to K=20. How would your answers to parts (a) change? c.) Does the widget production function exhibit constant, increasing, or decreasing retums to scale?
Suppose that Tim runs his own lawn care service and that his firm is competitive in the lawn care industry. He has a fixed number of tools that can be used to maintain a yard, but he needs to determine the productivity gained from hiring various numbers of workers per week. Which of the following statements best represents the idea behind the marginal product of labor ( MPL )? When Tim hires more workers, he can mow more lawns per week, but at a decreasing rate. If Tim hires twice as many workers per week, he can mow twice as many lawns per week. If Tim buys one more lawn mower, he can mow 13 more lawns per week. If Tim hires an additional worker per week, he can mow 11 more lawns per week. The following graph portrays the weekly total product curve for lawn mowing given a fixed amount of capital and varying labor inputs. (Note: Each black point (plus symbol) represents a point on the total product curve.) 100 90 во 70 60 50 40 30 20 10 xxxx_ Total Product ° 0 1 2 4 5 7 8 10 LABOR…
How does the curvature of an isoquant relate to the marginal rate of technical substitution along an isoquant?
In June 2020, the Egyptian national airline carrier announced a considerable reduction in the prices of domestic flights with the aim to promote domestic tourism. This is expected to increase the economic activity of several Egyptian cities that were negatively impacted by the suspension of international as well as national tourism movements caused by COVID-19 pandemic. Aswan is one of the cities to benefit from this price reduction. a) With the aid of illustrative graphs, explain the impact of this decision on the labour market of Aswan, especially on the rates of unemployment and labour market equilibrium. b) Assume that Luxor city has been excluded from this decision by the national airline carrier. Discuss whether it's labour market outcomes would still be impacted by it? c) Do you expect that the wages of workers- that has the same skills and productivity - will be the same in both cities?
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3. Elsa's handicrafts has the production function f(x1,x2) = (min{x1 ,2x2})2, where x, is the amount of plastic used, x, is the amount of labor used, and f(x1,x2) is the number of lawn ornaments produced. Let w, be the price per unit of plastic and w, be the wage per unit of labor. а. What is Elsa's cost function c(w1,w2,y)? b. If wi = w2 = 1, then what is Elsa's marginal cost of producing y units of output? What is the number of units of output that she would supply at price p? At these factor prices, what is her average cost per unit of output? c. If the competitive price of the lawn ornaments she sells is p = 48, and w, = w2 = 1, how many will she produce? How much profit will she make? d. More generally, at factor prices w, and w2, what is her marginal cost? At these factor prices and an output price of p, what is the number of units she will choose to supply?
Ian works at an iron smelter in Pittsburgh, the center of iron production in America. Due to the difficulty in measuring the productivity of individual employees, Ian's employer as well as the other iron smelters all pay an efficiency wage. Adjust the wage line on the graph to reflect this situation. What characteristic of efficiency-wage jobs is not supported by the situation shown in the graph? The wage rate will eventually return to the market-clearing level. Efficiency wages result in an increase in the rate of unemployment. Elevated wages serve as an economic incentive to work harder. Efficiency wage jobs result in a surplus of workers at the wage being offered. Wage ($ per hour) Wage Quantity of workers (in thousands) S O
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Ab 6 Economics To construct a house, Eric uses power tools (qK) and hires workers (qL). Power tool rental is $10 per hour, while each worker can be hired at a rate of $30 per hour. If the wage rate falls to $20, what is the value of the slope of the new isocost curve?
4. Ariel's T-shirt company hires labor at a rate of $8 per hour and rents capital (sewing machines) at a cost of $128 per machine per day. Throughout this question, you can think of Ariel renting fractions of sewing machines if necessary. Her production function is given by q = 6LK where q measures the number of T-shirts produced each day, L measures the total number of hours worked by all employees in a day and K measures the number of sewing machines. (a) Using the Lagrangian technique, find the cost-minimizing combination of labor and capital for the production of q T-shirts per day. (b) Write down an equation for Ariel's long-run expansion path. (c) Find Ariel's long-run total, average, and marginal cost as a function of the number of T-shirts she produces each day. (d) Sketch Ariel's long-run total expansion path in a diagram. Sketch at least two isoquants with the associated isocost lines. Using your diagram, determine how Ariel's long-run expansion path will shift if the cost of…
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