Concept explainers
To evaluate: The affect of
Explanation of Solution
Much as supply and
Many different factors will influence labor demand and labor supply, affecting wages, rates of employment and, thus, equilibrium. Changes in demand for labor from companies, for example, may result from market demand for goods or a shift in government regulations impacting labor costs. Changes in labor supply may result from the population, such as growth that increases the size of the labor force or a shift in workers' age composition, such as more elderly workers or younger employees. Labor supply can also change because of employee preferences and labor market attitudes.
Example:
Of those employers who want to hire nurses, the demand curve (D) intersects with the supply curve (S) of those who are eligible and able to serve as nurses at the equilibrium point (E). The average pay is $70,000, and the excess amount is 34,000 nurses. With an above-equilibrium wage of $75,000, the quantity given increases to 38,000, but the quantity of nurses requested reductions to 33,000 at the higher pay. There will be an oversupply or surplus of nurses at this above-equilibrium wage. With a $60,000 under-equilibrium pay, the quantity delivered falls to 27,000 while the quantity demanded rises to 40,000 nurses at the lower wage.
Introduction: The labor market, relates to labor supply and demand, in which supply is generated by the workers and demand is given by the employers. It is a major component of every economy, and is closely correlated with money, commodities, and
Chapter 12 Solutions
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- Output TFC ($) TVC ($) TC ($) (Q) 2 100 104 204 3 100 203 303 4 100 300 400 5 100 405 505 6 100 512 612 7 100 621 721 Given the information about short-run costs in the table above, we can conclude that the firm will minimize the average total cost of production when Q = (Round your response to the nearest whole number.)arrow_forwardThe following data show the total output for a firm when specified amounts of labour are combined with a fixed amount of capital. Assume that the wage per unit of labour is $20 and the cost of the capital is $100. Labour per unit of time 0 1 Total Output 0 25 T 2 3 4 5 75 137 212 267 The marginal product of labour is at its maximum when the firm changes the amount of labour hired from ○ A. 0 to 1 unit. ○ B. 3 to 4 units. OC. 2 to 3 units. OD. 1 to 2 units. ○ E. 4 to 5 units.arrow_forwardThe table below provides the annual revenues and costs for a family-owned firm producing catered meals. Total Revenues ($) 600,000 Total Costs ($) - wages and salaries 250,000 -risk-free return of 7% on owners' capital of $300,000 21,000 - rent 101,000 - depreciation of capital equipment 22,000 -risk premium of 9% on owners' capital of $300,000 27,000 - intermediate inputs 146,000 -forgone wages of owners in alternative employment -interest on bank loan 70,000 11,000 The implicit costs for this family-owned firm are ○ A. $70,000. OB. $97,000. OC. $589,000. OD. $118,000. ○ E. $48,000.arrow_forward
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