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11.
(Industrial Unions) Why are unions more effective at rais- ing wages in oligopolistic industries than in competitive industries?
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- 6. Monopsony basics Consider a newspaper in a small town that has monopsony power in hiring journalists. The following table shows the labor hours that will be supplied at each of the given hourly wages, as well as the total cost of labor at each quantity of labor. Suppose the newspaper's demand for labor as a function MVP of the marginal value product of labor (MVPL) is given by L= 5.5- 20 Compute the marginal expense (MEL) and marginal value product (MVPL) of adding an additional hour at each quantity and enter the values into the following table. Hourly Wage WAGE (Dollars per hour) 90 80 60 10 100 40 20 30 20 40 70 10 50 0 30 The following graph depicts the supply of labor in this market. Labor Supplied (Hours) Use the grey points (star symbol) to plot the marginal expense at the five quantities of labor given in the previous table. Then use the blue points (circle symbol) to plot the firm's demand for labor as a function of the MVPL- 0 1 1 2 2 3 3 4 5 Total Labor Cost (Dollars per…M114. Graphing demand for labor and computing the optimal quantity A company operates in a perfectly competitive market, selling each unit of output for a price of $10 and paying the market wage of $130 per day for each worker it hires. In the following table, complete the column for the marginal revenue product of labor (MRPL) at each quantity of workers. Labor Output Marginal Product of Labor Marginal Revenue Product of Labor (Number of workers) (Units of output) (Units of output) (Dollars) 0 0 15 1 15 14 2 29 12 3 41 10 4 51 6 5 57 On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show the wage rate. Line segments will automatically connect the points. (Note: If you cannot place the wage rate at the level you want, move the two end points individually.) Hint: Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the…
- 81.) Suppose the supply curve for labor in a competitive industry is given by Ls = 10 + w and the demand curve for labor is Ld = 40-4w. What is the equilibrium wage and employment? What is the unemployment rate? Suppose now that all firms pay an efficiency wage of $8/hr. How many workers lose their jobs? What is the increase in the size of the labor force? What is the increase in the labor force participation rate? What is the new unemployment rate?2.) Two individuals, Ms. S and Ms. T, just graduated from college and are looking for jobs. Both individuals have only limited amounts of savings. As a result, their reservation wages are identical. However, Ms. S had the opportunity to take this class, so her skills are superior to those of Ms. T. Answer the following questions, providing graphs to demonstrate what is occurring where appropriate.(a) How does the expected duration of unemployment compare across the two individuals?(b) How does the wage each individual expects to receive…21
- 34. The marginal cost of a unit of labour in a perfectly competitive labour market is equal to: The average marginal revenue product of all workers hired B.) The market wage rate V C. The price of the output d. The average variable cost of production4. Competitive labor market equilibrium A company operates in a perfectly competitive market, selling each unit of output for a price of $30 and paying the market wage of $375 per day for each worker it hires. In the following table, complete the column for the marginal revenue product of labor (MRP) at each quantity of workers. Labor Input Total Output (Number of workers) (Units of output) Marginal Product Marginal Revenue Product (Units of output) (Dollars) WAGE RATE (Delars per day) On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show the wage rate. Line segments will automatically connect the points. (Note: If you cannot place the wage rate at the level you want, move the two end points individually.) 500 Hint: Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the marginal revenue product for the first worker…3. [TRUE / FALSE] pls explain When a monopsonist is operating in the long-run, then at theprofit-maximizing output average cost can be increasing.
- B1: COSTS and PROFITS with PERFECT-SUBSTITUTES (d) What do we mean by an exit price? What is the exit price if r = $100 and w = $2000? Explain. (e) Now suppose wages (w) falls. At what value of w will the firm switch from K into L? Use the isocost - isoquant figure to explain. (f) Does a lower w change the exit-price? If so, how? Explain. 110. Assuming a player is not part of a union, the player is better off if the goods market is and the labor market is A) competitive; a monopsony. C) a monopoly; competitive. B) competitive; competitive. D) a monopoly; a monopsony.3. There are two profit maximising firms, Alpha Inc. and Beta Ltd. Both use labour, L and capital, K to produce their output, Q and they both employ workers at the minimum wage. Following a government review, the national minimum wage rises from W₁ to W₂. (a) Use an isoquant/isocost diagram to show how this will affect Alpha's optimal choice of inputs, assuming it wants to continue to produce the same output. (b) Following the increase in the wage rate, Alpha Inc. reduces the number of workers employed by significantly more than Beta Ltd. Construct the demand curve for labour for Alpha Inc. and explain how and why its shape will change if you graphed the same curve for Beta Ltd. There is a third firm in this market called Gamma plc. which also uses labour and capital to produce output, where w is the price of labour, r is the price of capital and Q is the output. Suppose that Gamma plc. is a price-taking firm and faces a cost function: 1 1 c(w,r,Q) = — w²r²Q² (c) By deriving an…
