Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134643175
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Chapter 14, Problem 2RQ
To determine
Backward bending of labor supply curve
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Why might a labor supply curve be backward bending? Explain your answer using the concepts of the income effect and the substitution effect. (You can explain your answer using words or you can draw a graph accompanied with a brief explanation)
How does the addition error occur when obtaining the market labor demand curve? What to do to avoid this? Explain with the help of the figure.
If an individual labor supply curve bends backward at some high wage, so does the market labor supply curve.
True or False?
Chapter 14 Solutions
Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (9th Edition) (Pearson Series in Economics)
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- If you increase the total amount of labor, the labor constraints curve becomes flatter. true or falsearrow_forward“The firm’s demand schedule for labour is a negative function of the wage because, as the firm uses more labour, it has to utilize poorer-quality labour, and hence pays a lower wage.” True or false? Explain.arrow_forwardwhy does a simple market demand for labor curve and a simple market supply of labor curve seem to form the letter 'X' .arrow_forward
- In some extreme cases, an individual’s labor supply curve may be downward sloping at higher hourly wage rates. That is, further increases in the worker’s wage lead them to work fewer hours. Why might an individual worker exhibit such behavior?arrow_forwardWhy does the learning curve apply mainly to direct rather than indirect labor?arrow_forwardUse a diagram to thoroughly explain the backward bending labor supply curve and explain what income and substitution effects are.arrow_forward
- Bob White argues that if his wage went up from $10/hour to $20/hour he would still be able to pay rent and feed his family even if he worked half as many hours. So, if his wage increased he would want to work proportionally less. What is strange about Bob White's labor supply curve? it is very elastic it is very inelastic it slopes down it is verticalarrow_forwardWhat is meant by an inferior factor of production? How would the firm’s demand for labour be altered if labour were an inferior factor of production?arrow_forwardWhat is the value marginal product of labor if: P = $10, MPL = $25, and APL = 40?arrow_forward
- 4. Profit maximization Consider Blewitt's Farm, a small blueberry grower relative to the size of the market whose production has no impact on wages and prices. The following table presents Blewitt's production schedule for blueberries: Labor Output (Number of workers) (Pounds of blueberries) 0 0 1 2 3 4 5 сл 20 38 54 68 80 Suppose that the market wage for blueberry pickers is $200 per worker per day, and the price of blueberries is $13 per pound.arrow_forwardYou are given a scenario where this a change in a factor of production or a change in demand for an item. You need to explain in sentence form how this would change demand for labor. You develop a popular video game and continue to develop new versions to keep people interested in the game.arrow_forwardSuppose the firm only produces good X and that the price of good Y, a substitutegood, decreases. What will happen to the optimal quantity of labor the firm willhire? Explain.arrow_forward
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