Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 10, Problem 2.3P
To determine
Compensation to employees.
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Assume the Jacksonville Jaguars, a football team, are in the process of hiring players. The following hypothetical table of data gives the necessary
information to the manager to hire quarterbacks.
Salary
(Thousands of
dollars)
Number of
Quarterbacks
0
о
100 1
200
2
300
3
400
4
500
5
Total Cost of
Quarterbacks
(Thousands of
dollars)
Marginal Factor Cost
(MFC)
Marginal Revenue
Product (MRP)
(Thousands of
dollars)
(Thousands of dollars)
100
700
100
300
650
400
500
600
900
700
550
1,600
900
500
2,500
On the following graph, use orange points (square symbol) to plot the labor supply curve for quarterbacks, starting with point (1, 100). Next, use
green points (triangle symbol) to plot the marginal factor cost curve on the midpoints of the horizontal axis, starting with point (0.5, 100).
Note: Plot points from left to right in the order you would like them to appear. Points will connect automatically.
SALARY (Thousands of dollars)
1000
900
800
700
Labor Supply
600
MFC
MRP
500
400
300
200
100…
5. In Chapter 9 of your text, complete Exercise #3 found on page 321.
Suppose that you observe that the wages for accountants in your town have gone up and that the
number of accountants employed has also gone up. Which one of the following conditions could
explain this? Illustrate your answer with a graph and explain in a brief paragraph.
a) Businesses are failing, reducing the need for accountants.
b) Many accountants are leaving the field in order to train to become financial analysts
instead.
c) A rash of business scandals has increased the demand for auditing services performed by
accountants.
d) The local university has just graduated an unusually large group of accountants.
The following table contains the relationship between a number of trainers working at a new gym and the number of client's they can train. These client's represent the output of trainers. Client's pay $40 per session.
A. Find the marginal product of labor (mpl) and the value of the marginal product of labor (vmpl) for each additional trainer hired and record these numbers in columns in the table.
B. Premier trainers earn $200 an hour. How many trainers will the gym hire?
Chapter 10 Solutions
Principles of Economics (12th Edition)
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