ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337408059
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 11, Problem 7P
To determine
(a)
The marginal revenue product for each additional unit of labor.
Concept Introduction:
Marginal revenue: This refers to the market value of an additional unit of output.
To determine
(b)
The demand curve for labor is to be constructed.
Concept Introduction:
Marginal revenue: This refers to the market value of an additional unit of output.
Demand for labor: This is a concept that defines the amount of demand for labor that an economy or firm is willing to employ at a given point of time.
To determine
(c)
The amount of labor hired when the wage rate is $15 per hour.
Concept Introduction:
Marginal revenue: This refers to the market value of an additional unit of output.
Demand for labor: This is a concept that defines the amount of demand for labor that an economy or firm is willing to employ at a given point of time.
To determine
(d)
The firm’s total revenue is to be compared with the total amount paid for labor.
Concept Introduction:
Marginal revenue: This refers to the market value of an additional unit of output.
Demand for labor: This is a concept that defines the amount of demand for labor that an economy or firm is willing to employ at a given point of time.
To determine
(e)
The changes in the answers to part b and c with an increase in the price of output to $5 per unit.
Concept Introduction:
Marginal revenue: this refers to the market value of an additional unit of output.
Demand for labor: this is a concept that defines the amount of demand for labor that an economy or firm is willing to employ at a given point of time.
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Demand for Resources
A small manufacturing company has the following daily relationship between labor and output:
Units of
Total
Labor
Product
1
2
21
3
35
52
61
65
61
7
If the firm sells into a perfectly competitive market and the equilibrium price is $3.25 per unit,
compute the following:
Marginal
Units of
Marginal
Product
Revenue
Labor
Product
1
2
3
5
7
How many workers will the firm hire is the market wage rate (includining benefits) is $30.00? Wł
3
How many workers will the firm hire is the market wage rate(includining benefits) is $20.00?
4 If the equilibrium price per unit of output dencreases, what would you expect
to happen to the number of workers hired?
If the firm sells in a imperfectly competitive market such that price per unit starts at $4.50 per ur
declines by $0.10 per unit as more as sold,
what do you think would happen to the number of labor units hired at $30.00 per unit?
5
2.
Which of the following can reduce the marginal revenue product of labor?
Select one:
a. A reduction in the demand for firms– products.
b. A reduction in workers– supply of labor to firms.
c. A decrease in firms– demand for inputs that substitute for labor.
d. An increase in the extra output firms gain from adding another unit of labor.
Chapter 11 Solutions
ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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