Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 18, Problem 1PA
Subpart (a):
To determine
The demand and equilibrium price of apple.
Subpart (b):
To determine
The demand and equilibrium price of apple.
Subpart (c):
To determine
The demand and equilibrium price of apple.
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Suppose that the president proposes a new lawaimed at reducing healthcare costs: All Americans arerequired to eat one apple daily.a. How would this apple-a-day law affect thedemand and equilibrium price of apples?b. How would the law affect the marginal productand the value of the marginal product of applepickers?c. How would the law affect the demand andequilibrium wage for apple pickers?
What happens to the supply curve when prices of factor of production rises
Consider the market for labor depicted by the demand and supply curves that follow.
Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator.
Graph Input Tool
Market for Labor
24
I Wage
(Dollars per hour)
21
Supply
3.00
Labor Supplied
(Thousands of
workers)
18
Labor Demanded
(Thousands of
workers)
1,050
150
15
12
Demand
3
150 300 450 600 750 900 1050 1200
LABOR (Thousands of workers)
Complete the following table with the quantity of labor supplied and demanded if the wage is set at $15.00. Then indicate whether this wage will
result in a shortage or a surplus.
Hint: Be sure to pay attention to the units used on the graph and in the table. For example, type in 100 for 100,000 workers.
Labor Demanded
Labor Supplied
Wage
(Thousands of workers) (Thousands of workers) Shortage or Surplus?
$15.00
Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $15.00.
Which of the following statements…
Chapter 18 Solutions
Principles of Economics (MindTap Course List)
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Similar questions
- Explain how to find the equilibrium priceand quantity for a factor of production.arrow_forwardWhat happens to the supply curve when the price of the factor of production would rise?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. There is an increase in the price of steel. You make tractors.arrow_forward
- You 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 how this would change demand for labor. 1. The coronavirus pandemic forces people to shelter in place. You are an airplane mechanic looking for work in Louisville where UPS is headquartered.arrow_forwardWhat is the effect if the cost of labor increases? O Price increases, quantity increases O Price decreases, quantity decreases O Price decreases, quantity increases O Price increases, quantity decreasesarrow_forwardthese are the drop down options Washes per hour dollarsarrow_forward
- Suppose Fred produces 500 litres of milk every day with 10 workers. The price of milk is $12 per litre, and each worker is paid $550 daily. If the marginal product of the last worker employed is 40 litres of milk, explain whether Fred is maximizing his profit. If not, can Fred increase his profit by employing more or fewer workers? If Fred buys more dairy cattles, how will it affect his demand for labor? Explain with a diagram.arrow_forwardwheat is the main input in the production of flour. all else equal, if the price of wheat decreases, what would we expect?arrow_forwardImagine a firm that employs two types of workers – some with computer skills and others withno technology related skills. (i) Explain how a firm’s production function is related to its marginal product of labour, howa firm’s marginal product of labour is related to the value of its marginal product and how afirm’s value of marginal product is related to its demand for labour. (ii) Explain how the wage can adjust to balance the supply and demand for labour whilesimultaneously equalling the value of the marginal product of labour.arrow_forward
- suppose Fred produces 500 litres of milk every day with 10 workers. the price of milk is $12 per litre, and each worker is paid $550 daily. if th margin product of the last worker employed is 40 litres of milk, explain whether Fred is maximizing his profit. If not, can Fred incrase his profit by employing more or fewer workers? If Fred buys more dairy cattles, how will it affect his demand for labor? Explain with a diagram.arrow_forwardEconomics: Labor Economics Question: 1 If unskilled labor and robotics are substitutes in production a decrease in the price of robotics is predicted to a. decrease the demand for unskilled labor if the scale effect outweighs the substitution effect. b. decrease the demand for unskilled labor if the substitution effect outweighs the scale effect. c. unambiguously increase the demand for unskilled labor. d. unambiguously decrease the demand for unskilled labor. Question: 2 Assuming capital is fixed in the short run and variable in the long run what would likely happen to wages in the short and long run following a wave of immigration? a. a large decrease in the short run, followed by a smaller decrease in the long run b. a small decrease in the short run followed by a larger decrease in the long run c. an increase in the short run followed by a large decrease in the long run d. a decrease in the short run followed by an increase in the long run Question: 3 Which of the following…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 own a sports equipment manufacturing firm. You were just informed rent at your warehouse space would double.arrow_forward
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