Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 13SQ
To determine
The equilibrium in the labor market.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Which of the following would improve a worker’s marginal product?
Group of answer choices
an increase in the minimum wage
investment in human capital
policies requiring health insurance
higher tariffs on exported goods
If a union successfully restricts the supply of labor to the firm but the union has no effect on the demand for labor, then the
Group of answer choices
wage increases and employment decreases.
wage increases and there is no change in employment.
wage increases and there is an unambiguous effect on employment.
wage increases and employment increases.
Please answer to these two questions
Which of the following events may increase the marginal product of labor? Check all that apply.
An increase in the wage rate
A technological improvement that is complementary for this type of labor
A technological improvement that is substitutable for the labor in this market
Good weather causes an increase in supply and a fall in price for one of the inputs used to make the good
Consider the labour markets for skilled labour and unskilled labour.
The labour demand curve for skilled workers is given by w = e(150 - 5L)/100. The labour demand curve for unskilled workers is w = 50 - 2L. The labour supply for each of the two labour markets is given by L = 20.
The effort of firm's skilled workers depends on their wage according to the following schedule:
wage (w)
20
25
30
35
40
45
Effort (e)
16
24
30
34
36
36
a) Calculate the equilibrium employment, unemployment, and wage for unskilled workers.
b) Calculate the profit-maximizing contract (w,e).
c) Calculate the equilibrium employment, unemployment, and wage for skilled workers.
d) In a single labeled graph in (w - L), illustrate the labour market equilibria for skilled and unskilled workers.
e) Calculate the cumulative income distribution for each labour market by reporting the cumulative shares for the following percentiles: 50% and 100%.
f) In a single graph, construct the Lorenz curve representing labour…
Chapter 11 Solutions
Micro Economics For Today
Ch. 11.3 - Prob. 1YTECh. 11 - Prob. 1SQPCh. 11 - Prob. 2SQPCh. 11 - Prob. 3SQPCh. 11 - Prob. 4SQPCh. 11 - Prob. 5SQPCh. 11 - Prob. 6SQPCh. 11 - Prob. 7SQPCh. 11 - Prob. 8SQPCh. 11 - Prob. 9SQP
Ch. 11 - Prob. 10SQPCh. 11 - Prob. 11SQPCh. 11 - Prob. 1SQCh. 11 - Prob. 2SQCh. 11 - Prob. 3SQCh. 11 - Prob. 4SQCh. 11 - Prob. 5SQCh. 11 - Prob. 6SQCh. 11 - Prob. 7SQCh. 11 - Prob. 8SQCh. 11 - Prob. 9SQCh. 11 - Prob. 10SQCh. 11 - Prob. 11SQCh. 11 - Prob. 12SQCh. 11 - Prob. 13SQCh. 11 - Prob. 14SQCh. 11 - Prob. 15SQCh. 11 - Prob. 16SQCh. 11 - Prob. 17SQCh. 11 - Prob. 18SQCh. 11 - Prob. 19SQCh. 11 - Prob. 20SQ
Knowledge Booster
Similar questions
- Click to see additional instructions Consider a firm that exists for one period. The value of labour's marginal product is given by: VMP =Px MP, where P is the price of output, and MPL = 20 - 0.1L. The wage rate is $20. Assume that there are hiring and training costs of $40 per worker. If the firm expects the price of output to be $25, what is the optimal level of employment? Important note: Your answer needs to be rounded to 2 decimal places (e.g. 1.23). Any intermediate results should be rounded to at least 4 decimal places. Failure to do so may result in your answer not being accepted as a correct one.arrow_forwardWhich of the following is likely to shift the labor supply curve to the right, assuming all else equal? A rise in the wage rate A fall in the wage rate A rise in the immigration of workers in search of better work opportunities A fall in the population of a country due to a natural disasterarrow_forwardConsider a perfectly competitive labour market that is initially in equilibrium. The country within which this labour market is located has not previously accepted immigrants, but is now considering whether or not to change this policy and start accepting immigrants. One of the key ideas being considered is the impact that immigrants will have on the equilibrium wage earned by local workers in the aforementioned labour market. The country's Prime Minister has asked you to provide them with advice on the matter. a) First, the Prime Minister would like to better understand the reasons why the introduction of immigrants into their country might result in a lower equilibrium wage in the aforementioned perfectly competitive labour market. Describe the general logic as to how the introduction of immigrants into a perfectly competitive labour market might result in a lower equilibrium wage. b) Next, the Prime Minister would like to better understand the reasons why the introduction of…arrow_forward
- A firm hires labor in a perfectly competitive labor market. Its current profit-maximizing hourly output is 100 units, which the firm sells at a price of $5 per unit. The Marginal Physical product (MPP) of the last unit of labor employed is 5 units per hour. The firm pays each worker an hourly wage of $15. a)What Marginal Revenue (MR) does the firm earn from sale of the output produced by the last worker employed? b)Does this firm sell its output in a perfectly competitive market?arrow_forwardNonearrow_forwardThe marginal product of hiring a fourth worker is 40 units of output. The wage rate is $15, and the price of output is $2. How much will the fourth worker increase the firm's revenue? $30 $40 $60 $20 $80arrow_forward
- Suppose the supply curve of lab assistants is given by w = 8 + 6E, while the demand curve is given by w = 40 – 2E. (Assume is in 000s of persons and w is the annual salary in thousands of dollars). Calculate the equilibrium wage and employment level.arrow_forwardOne of these four answers could cause the demand curve for labor to shift to the right. Which one? Group of answer choices a decrease in the firm's product price an increase in demand for the firm's product a decrease in labor productivity an increase in the wage ratearrow_forwardGive typing answer with explanation and conclusion 3. The general assumption is that the demand for labour usually goes hand in hand with the demand for product. That is, the higher the demand for product, the higher will be the demand for labour. Is this always true? Use specific examples from your readings and models discussed on the course to facilitate your answer. (800 words only)arrow_forward
- Q8 In the Canadian labour market, demand for labour can be impacted by elasticity of the product in which labour is an input. Suppose that the labour cost to total cost ratio in industry A (cannabis sector) is 14 percent, while in industry B (fertilizer sector) it is 68 percent. Other things equal, labour demand will be Multiple Choice more elastic in industry B than in A. constant in both industries A and B. relatively elastic in both industries A and B. relatively inelastic in both industries A and B. more elastic in industry A than in B.arrow_forwardSupply: Thinking Like a Seller - End of Chapter Problem Jerome is working as an IT consultant. His individual labor supply curve is given in the accompanying graph. Jerome decides to enroll in college and will begin taking classes next semester. Make the appropriate change to the graph to show the most likely effect on Jerome's labor supply curve of his decision to attend college. If Jerome's decision to attend college results in a change in supply, shift the supply curve appropriately, but leave the wage line unchanged. If Jerome's decision to attend college results in a change in quantity supplied, adjust the wage line appropriately, but leave the supply curve unchanged. Wage Jerome's individual labor supply curve Wage Quantity Supplyarrow_forwardDemand for labour is referred to as derived demand because it a. Has an inverse relationship with wages b. Is determined by marginal utility of labour c. Depends on capital goods used with labour d. Depends on the demand for final products that labour is used to parrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Survey of Economics (MindTap Course List)EconomicsISBN:9781305260948Author:Irvin B. TuckerPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Survey of Economics (MindTap Course List)
Economics
ISBN:9781305260948
Author:Irvin B. Tucker
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning