Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 18, Problem 8PA
Subpart (a):
To determine
The changes in labor market after the introduction of fringe benefits .
Subpart (b):
To determine
The changes in labor market after the introduction of fringe benefits.
Subpart (c):
To determine
The changes in labor market after the introduction of fringe benefits.
Subpart (d):
To determine
The changes in labor market after the introduction of fringe benefits.
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V4. Suppose that you have the following information about the market for employees in your buisness: Supply: W=20+N
Demand: W=40-N
a. Suppose that the union negotiates a team size of only 5 employees. Draw this graphically and calculate the new equilibrium wage number of employees.
b. Draw this graphically and calculate the equilibrium wage and number of employees hired.
Draw a wage setting curve, with the wage (S/hr) on the y-axis and the employment level on the x-axis. a. Suppose the market wage is $35/hr. Label this market wage on your graph of your wage setting
curve, W1 = $35/hr. Label the corresponding level of market employment, E1. b. Draw a second graph of a firm with pricing power that uses labor in their production process. Assume their marginal cost of
production is equal to the labor rate of $35/hr. Draw this firms demand curve, marginal revenue curve and marginal cost curve. (Any downward sloping demand curve and marginal revenue curve will do, as
long as the y-intercept is above marginal cost (e.g., P = 100-10Q, MR = 100-20Q).) Label the firms profit maximizing level of price and quantity. c. Now, suppose a global pandemic reduces aggregate
demand. How does this affect the demand curve the firm faces? How does this affect the production quantity, and labor demanded? Show this on your firm profit maximization graph. d. Assume employees…
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.
Chapter 18 Solutions
Principles of Economics (MindTap Course List)
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