Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 26.2, Problem 2ST
To determine
Coefficient of
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Suppose a firm purchases labor in a competitive labor market and sells it product in a competitive product market. The firm's elasticity of demand for labor is -2.50. Suppose the wage increases by 4%. By what percentage will the quantity of labor hired by the firm change? Show your work.
Explain the relationship between the own-wage elasticity of labor demand and
output demand elasticity.
labour costs as a share of total costs of production.
Assume a woman’s non-labor income elasticity is -0.2 and own wage elasticity is
0.4 and she originally works 30 hours per week.
b. What is the effect of a wage increase from $35/hour to $40/hour on her weekly
labor income? Go back to assuming her original hours worked (30 hours each
week). Treat this part separately from part a.
Chapter 26 Solutions
Economics (MindTap Course List)
Ch. 26.1 - Prob. 1STCh. 26.1 - Prob. 2STCh. 26.1 - Prob. 3STCh. 26.1 - Prob. 4STCh. 26.2 - Prob. 1STCh. 26.2 - Prob. 2STCh. 26.2 - Prob. 3STCh. 26.2 - Prob. 4STCh. 26 - Prob. 1QPCh. 26 - Prob. 2QP
Ch. 26 - Prob. 3QPCh. 26 - Compare the firms least-cost rule with how buyers...Ch. 26 - Prob. 5QPCh. 26 - Prob. 6QPCh. 26 - Prob. 7QPCh. 26 - Prob. 8QPCh. 26 - Prob. 9QPCh. 26 - Prob. 10QPCh. 26 - Prob. 11QPCh. 26 - Prob. 12QPCh. 26 - Prob. 13QPCh. 26 - Prob. 14QPCh. 26 - Prob. 15QPCh. 26 - Prob. 16QPCh. 26 - Prob. 1WNGCh. 26 - Prob. 2WNGCh. 26 - Prob. 3WNGCh. 26 - Prob. 4WNGCh. 26 - Prob. 5WNG
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- Other than the demand for labor, what would be another example of a 'derived demand?arrow_forwardSuppose a firm purchases labor in a competitive labor market and sells its product in a competitive product market. The firm’s elasticity of demand for labor is -0.4. Suppose the wage increases by 5 percent. What will happen to the number of workers hired by the firm? What will happen to the marginal productivity of the last worker hired by the firm?arrow_forward6arrow_forward
- Answer the following questions based on the below diagram that shows the labour demand curve for a firm, where X is the mid-point of the line MN. Wage (RM) M 12 Quantity of labour 3 6. a. Calculate the elasticity of labour demand between the wage of RM2 and RM4. b. Calculate the elasticity of labour demand between the wage of RM8 and RM10. 6.arrow_forwardQ38 In the Canadian labour market, demand for labour can be impacted by elasticity of the product in which labour is an input. What will the elasticity of factor demand be if unit wages rise by 5 percent and the number of employed workers falls by 9 percent? Multiple Choice 1.67. 0.56 1.80 2.36 3.00arrow_forwardQ8 In the Canadian labour market, demand for labour can be impacted by elasticity of the product in which labour is an input. Suppose that the labour cost to total cost ratio in industry A (cannabis sector) is 14 percent, while in industry B (fertilizer sector) it is 68 percent. Other things equal, labour demand will be Multiple Choice more elastic in industry B than in A. constant in both industries A and B. relatively elastic in both industries A and B. relatively inelastic in both industries A and B. more elastic in industry A than in B.arrow_forward
- Need some assistance with question. Explain and discuss the relationship between the elasticity of demand for the product and the elasticity of demand for the labor that produces the product. Based on your explanation question 1 above, discuss how that relationship between the elasticity of demand for products and labor would affect your job searching strategy in the future. Explain how the relationship between elasticity of demand for the product and labor would affect your major or specialization while you are studying at a higher education institution.arrow_forward1. Is the price elasticity of demand for gasoline more INELASTIC over a shorter or a longer period of time? Explain. 2. Is the price elasticity of supply, in general, more INELASTIC over a shorter or a longer period of time? Explain. 3. Is the supply curve for labor usually upward sloping? Explainarrow_forwardSuppose the supply of soccer players is give by the the equation Ls=W/10 and the valu of the marginal product is given by VMPL=100,000 - 100LD. Question 1 Compute the equilibrium number of players hired in a competitive labor market. Round to the nearest whole number. Question 2 Compute the equilibrium the wage paid to each player in a competitive labor market. Round to the nearest dollar.arrow_forward
- A firm’s technology requires it to combine 5 person-hours of labor with 3 machinehours to produce 1 unit of output. The firm has 15 machines in place and the wage rate rises from $10 per hour to $20 per hour. What is the firm’s short-run elasticity of labor demand?arrow_forwardQ47 In the Canadian labour market, demand for labour can be impacted by elasticity of the product in which labour is an input. Assume that the coefficient of elasticity of product demand in Canada is 2.4 in industry A (cannabis sector) and is 0.8 in industry B (fertilizer industry). Other things equal, labour demand will be Multiple Choice relatively elastic in both industries A and B. more elastic in industry B than in A. constant in both industries A and B. more elastic in industry A than in B. relatively inelastic in both industries A and B.arrow_forwardConsider the two examples of labour demand below. In which case is the wage elasticity of demand more elastic? Explain briefly. 1. The demand for physiotherapists, on the staffs of pro sports teams. 2. The demand for physiotherapists, at physiotherapy clinics.arrow_forward
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