Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 19, Problem 3PA
To determine
Experience and wages.
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Describe the factors that could cause an increase in the wage rate of workers.
6. Plotting the supply of labor
In Lexington, 90 people are willing to spend an hour working as pizza makers for an hourly wage of $10. For each additional $5 that the wage
increases above $10, an additional 30 people are willing to spend an hour working.
For hourly wages of $10, $15, $20, $25, and $30, plot the daily labor supply curve for pizza makers on the following graph.
WAGE (Dollars per hour)
50
45
40
35
30
25
20
15
10
5
0
0
30
60
90 120 150 180 210
LABOR (Number of workers)
240 270 300
Supply
?
Explain how decrease in non-labor income might affect the optimal labor supply decision? Use graphs.
Chapter 19 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
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Similar questions
- Which of the following would improve a worker’s marginal product? Group of answer choices an increase in the minimum wage investment in human capital policies requiring health insurance higher tariffs on exported goods If a union successfully restricts the supply of labor to the firm but the union has no effect on the demand for labor, then the Group of answer choices wage increases and employment decreases. wage increases and there is no change in employment. wage increases and there is an unambiguous effect on employment. wage increases and employment increases. Please answer to these two questionsarrow_forwardClick to see additional instructions Consider a firm that exists for one period. The value of labour's marginal product is given by: VMP =Px MP, where P is the price of output, and MPL = 20 - 0.1L. The wage rate is $20. Assume that there are hiring and training costs of $40 per worker. If the firm expects the price of output to be $25, what is the optimal level of employment? Important note: Your answer needs to be rounded to 2 decimal places (e.g. 1.23). Any intermediate results should be rounded to at least 4 decimal places. Failure to do so may result in your answer not being accepted as a correct one.arrow_forwardThe following table shows the relationship between the number of workers employed and outputs at Wendy’s Café. Number of Workers Cups of Coffee Produced (per day) 1 50 2 95 3 135 4 170 5 200 6 225 Suppose the market price of each cup of coffee is $20, and the market daily wage for each worker is $800. In order to maximize profit, how many workers should Wendy’s Café employ? Explain and show the steps of your calculations.arrow_forward
- how does the demand and supply for labour affect the wage rate of workers?arrow_forwardOn the following page, complete the labor demand table for a firm that is hiring labor competitively and selling its product in a purely competitive market. How many workers will the firm hire if the market wagerate is $11.95? $19.95? Explain why the firm will not hire a larger or smaller number of units of labor at each of these wage rates.arrow_forwardComplete the following labor demand table for a firm that is hiring labor competitively and selling its product in a competitive market. (Submit your answer as an Excel file using the table on the right or as a text file that presents your answers in a format similar to the table below). Units of Total Marginal Product Total Marginal Labor Product Product Price Revenue Revenue $2 a. How many workers will the firm hire if the market wage rate is $27.95? $19.95? Explain why the firm will not hire a larger or smaller number of units of labor at each of these wage rates. 1 17 2 2 31 2 43 2 4 53 Units of Labor Product Product Marginal Revenue Total Marglnal Product Total Price Revenue Product 5 60 2 $2 17 6 65 2 31 3 43 4 53 2 60 6 65 2arrow_forward
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