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?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 8P

See similar textbooks

Similar questions

1. Computing labor productivity and its relationship to the demand for 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 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 Output (Grills) 0 95 185 260 320 355 1 3 LABOR (Number of workers) Production Function
Gopher Excavators produces shovels in a small factory and sells the shovels in a competitive market. The following table shows the company's production function: Labor Output (Number of workers) (Shovels) 1 80 2 150 3 210 4 250 5 270 Use the blue points (circle symbol) to plot the production function for Gopher Excavators on the following graph. 300 270 240 Production Function 210 180 150 120 90 60 30 LABOR (Number of workers) OUTPUT (Shovels)
Suppose Die Cast Aluminum Co. is a subcontractor for the auto industry and makes specialized auto parts. There is a bracket it manufactures that it sells for $2.50. The following table shows the number of brackets that can be produced from a given number of labor hours. Assume that the company cannot hire labor for a fraction of an hour. Hours of Labor Output 50 90 1 3 120 4 140 150 155 6 157 The marginal product of labor for the third hour of labor is 30. (Enter your response as an integer.) The value of the marginal product of labor for the third hour of labor is 75. (Round your response to two decimal places.) If the wage paid to workers in Die Casť's plant is $25/hour, it should employ worker(s). (Enter your response as an integer.) If the wage paid to workers in Die Cast's plant is $35/hour, it should employ worker(s). (Enter your response as an integer.) If the wage is $25/hour, but the price of a bracket declines to $2.00, it should employ worker(s). (Enter your response as an…
According to the Wall Street Journal, Mitsubishi Motors recently announced a major restructuringplan in an attempt to reverse declining global sales. Suppose that as part of the restructuring planMitsubishi conducts an analysis of how labour and capital are used in its production process. Priorto restructuring Mitsubishi’s marginal rate of technical substitution is 0.15 ( in absolute value). Tohire workers. Suppose that Mitsubishi must pay the competitive hourly wage of US$ 15. In thestudy of production process and markets where capital is procured, suppose that Mitsubishidetermine that its marginal productivity of capital is 0.5 small cars per hour at its new targetedlevel of output and that capital is procured in a highly competitive market. The same studyindicates that the average selling price of Mitsubishi’s smallest car is US$ 9500. Determine therate at which Mitsubishi can rent capital and marginal productivity of labour at its new targetedlevel of output. To minimize costs…
Suppose Die Cast Aluminum Co. is a subcontractor for the auto industry and makes specialized auto parts. There is a bracket it manufactures that it sells for $1.50. The following table shows the number of brackets that can be produced from a given number of labor hours. Assume that the company cannot hire labor for a fraction of an hour. Hours of Labor Output 50 90 120 140 150 155 157 4. 6. The marginal product of labor for the third hour of labor is 30. (Enter your response as an integer.) The value of the marginal product of labor for the third hour of labor is 45. (Round your response to two decimal places.) If the wage paid to workers in Die Cast's plant is $25/hour, it should employ 4 worker(s). (Entor your response as an integer.) If the wage paid to workers in Die Cast's plant is $35/hour, it ahould employ 3 worker(s). (Enter your response as an integer.) If the wage is $25/hour, but the price of a bracket declines to $1.00, it should employ worker(s). (Enter your response as an…
The average product of labour is the output per employee often called labour productivity. Use the information in table 17.1 to answer the question below. Table 17.1 c) OD Output units d) 1 000 2 500 6 000 7.000 8 000 As the number of employees increases from 10 to 50 the average product of labour: a) Is constant b) Falls then rises Rises Falls Number of employees 10 20 30 40 50
Jenni owns a cooking school that specializes in seafood. Jenni has a limited supply of kitchen space for her instructors to use for lessons. As a result, each successive instructor adds less to Jenni's output of lessons. Cooking lessons cost $35 per hour. The table below shows, for each successive instructor, Jenni's output quantity, marginal product of labor, and value of marginal product. The VMP was found by multiplying the additional number of cooking lessons each additional worker provided (MPL) by $35, which was the price per lesson. Marginal Value of Quantity of Quantity product marginal product (VMP) lessons of labor of labor (hours) (MPL) 1. 10 10 $350 2 17 $245 3. 23 9. $210 4. 28 5. $175 32 4 %24140 35 3. $105 37 $70 38 $35
am. 118.
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.
It is easy to conclude that when hiring workers in the short run whose marginalproductivity rises, the average product of labor will rise as well. However, if workersproductivity declines, average product of labor may still be rising. Explain why this mayhappen.
The price of factor A is GHC20 per unit and the price of factor B is GHC300.00 per unit.The marginal product of factors A is 40units and the marginal product of factor B is 60units.Should the firm increase the employment of factor A and decrease the employment of B to minimize the total long run cost of producing existing output?Explain
1. The demand for labor Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley's production schedule for strawberries is given in the following table: Labor Input Total Output (Number of workers) (Pounds of strawberries) 0 WAGE RATE (Dollars per worker) 300 Suppose that the market wage for strawberry pickers is $170 per worker per day, and the price of strawberries is $12 per pound. 270 On the following graph, use the blue points (circle symbol) to plot Live Happley's labor demand curve when the output price is $12 per pound. Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the marginal revenue product of the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically connect the points. 240 210 180 150 120 90 60 30 1 0 2 3 4 5 0 0 18 34 48 60 70…