The Aguiar et al. (2017) study concluded that a revolution in the video game market-better games at a lower price-dramatically increased the amount of time young men spend playing video games and shifted their labour supply curve. In 2015, young men played video games for 3.2 hours per week on average. From 2000 through 2015, average annual hours of work for men aged 21-30, excluding full time students, dropped by 10%. Suppose the labour demand function is L = 200-w, and the supply curve is L = 50 + w-2V, where L is the hours worked, w is the wage, and V is a measure of the quality of video games. By how much do the equilibrium hours and wage vary as V increases?

The Aguiar et al. (2017) study concluded that a revolution in the video game market-better games at a lower price-dramatically increased the amount of time young men spend playing video games and shifted their labour supply curve. In 2015, young men played video games for 3.2 hours per week on average. From 2000 through 2015, average annual hours of work for men aged 21-30, excluding full time students, dropped by 10%. Suppose the labour demand function is L = 200-w, and the supply curve is L = 50 + w-2V, where L is the hours worked, w is the wage, and V is a measure of the quality of video games. By how much do the equilibrium hours and wage vary as V increases?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose a firm has a Cobb-Douglas production function given by: Q = A * L^0.5 * K^0.5 If the firm currently employs 100 units of labor and 64 units of capital and produces 500 units of output , can you calculate the value of the total factor productivity for this firm?
Derive the output elasticity of labour in the following alternative production function: Y = c + alnK + BlnL
Consider two hypothetical states that operate under different laws governing labor unions. The following graph shows the labor market in a state in the West. Initially, the market-clearing wage in this state is $8.00 per hour. Now, suppose that the General Assembly in this western state passes a law that makes it easier for workers to join a union. Through collective bargaining, the union negotiates an hourly wage of $10.00. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. DOW Supply Demand 0 200 400 GOD 800 1000 1200 1400 1000 LABOR (Thousands of workers) Graph Input Tool Enter $10.00 into the box labeled Wage on the previous graph. Hint: Be sure to pay attention to the units used on the graph. At the union wage, union workers will be employed. WAGE Market for Labor Wage (Dollars per hour) Labor Demanded (Thousands of workers) Adjust the graph to show what happens to employment and wages in the eastern…
A firm produces output via the function: Q = L - (L2/800), where Q is the output per week and L is the number of labor hours per week. The firm’s additional cost of hiring an extra hour of labor is about $30 per hour (wage plus fringe benefits). The firm faces the fixed selling price, P = $50. How much labor should the firm employ?
During the 1920s, Charles Cobb and Paul Dougkas modeled totalproduction output P (of a firm, company or entire economy) as a function of labourhours involved x and capital invested y (each includes the monetary worth of allbuildings and equipment). The Cobb-Douglas production function isP(x, y) = k x^α y^(1−α),where k ad α are constants representative of a particular firm or economy.(1) Show that doubling of both labor and capital results in doubling productionP.(2) Suppose a particular firm has the production function for k = 120 andα =3/4. Assume each unit of labor costs $250 and each unit of capital costs$400, and that the total expense for all costs cannot exceed $100,000. Findthe maximum production level for the firm.(3) Compute the production level at x = 64 and y = 81. If the capital isdecreased by 3 units, by how many units the labor should be adjusted toso that there is not change in production level.
Q26 Assume that Paul Bocuse's restaurant in Lyon is hiring labour in an amount such that the MRC of the last worker is $10 and his MRP is $15. On the basis of this information, we can say that Multiple Choice profits will be increased by hiring additional workers. the Paul Bocuse restaurant is maximizing profits. the Paul Bocuse restaurant is minimizing losses. profits will be increased by hiring fewer workers. marginal revenue product must exceed average revenue product.
Marie Johnston is a manager at a cell phone store and is making hiring decisions. The number of cell phones her store sells per day depends on the number of workers she hires, as shown in the accompanying table. She sells each cell phone for $300
Goleta Brewing Company hires only two types of labor, managers and brewing assistants (denoted M and B, respectively). GBC has the following Cobb-Douglas production function F(M,B) = M.5 B.5 and wants to produce 10 barrels of pale ale this week. If the wage of managers is $50 per hour and the wage of brewing assistants is $10 per hour, how many managers and brewing assistants should the firm hire (round to nearest whole number)? How does your answer change when the wage of managers decreases to $30 per hour and the wage of brewing assistants remains constant. Is this result consistent with your intuition?
When the production function is linear, q = 0.20L + 0.10K, the factors are perfect substitutes for one another and the isoquant is linear. Determine the equation for the isoquant when output equals 200 units. K= Assuming capital is plotted on the vertical axis and labor is plotted on the horizointal axis, what is the marginal rate of technical substitution (MRTS) in this case? MRTS = - (Enter a numeric response using a real number rounded to two decimal places.) tv MacBook Air DII F4 F6 F7 FB F10 F3 %23 & 3 4 5 7 8 { [ E R Y P D F G H J K > C N M command option .. .. - B >
Consider the following production function: Assume capital is fixed at K = 25. At what level of employment does the marginal product of labor equal zero? The marginal product of labor equals zero when L= q=48LK+20L2 3 (3) ₁³. (Enter a numeric response using an integer.)
A restaurant with one, two, three, or four employees can serve 35, 50, 64, or 75 customers, respectively. The marginal product of the third worker is:
Four (TYPE I) firms sell Product X in competitive markets at a price of 10. They each operate with the production function: x = 100L – L². Another firm with monopoly power (TYPE II) sells faces demand curve P = 160 – Y and has production function Y = 5L. All five firms hire as wage-takers in the same market where labour supply is w = 2L. Illustrate and quantify the equilibrium wage and the number of workers hired by each firm. а. Solve for the equilibrium wage and employment by each firm. b. Provide a 3-panel diagram. 6.