Labor Economics
7th Edition
ISBN: 9780078021886
Author: George J Borjas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 3, Problem 14P
(a)
To determine
Explain the given statement.
(b)
To determine
Explain the answer based on the paragraph.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
define marginal product of labor and value of the marginal product of labor.describe how a competitive,profit-maximizing firm decides how many workers to hire.
Ford Motors 2010-2019
Explain how the company uses high-skilled and low-skilled labor? Most companies will use some mix of both, but most companies will rely more heavily on one or the other.
Following is information on the production levels of three different firms. Firm A is currentlyproducing at a quantity where it is experiencing increasing returns. Firm B is currentlyproducing at a quantity where it is experiencing diminishing returns. Firm C is currentlyproducing at a quantity where it is experiencing negative returns.a. If each of the firms cut back on its labor force, what will happen to its marginalproduct of labor? And why?b. If each of the firms adds to its labor force, what will happen to its marginal product oflabor? And why?
Knowledge Booster
Similar questions
- The Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship between the number of workers Zippy hires and total output, with all other inputs being held constant. In the following table, for each quantity of labor input, fill in the marginal product (MP) and marginal revenue product (MRP) for Zippy. (Note: When the price doubles, this will also double the marginal revenue product.) Labor Input Total Output Marginal Product (Workers per day) (Boxes of paper per day) (Boxes of paper per day) 0 14 235 26 36 44 50 AAAAAA 6 54 Assume that the selling price of paper is $10 per box. If the wage rate is $110.00 per day, Zippy will hire Continue to assume that the selling price of paper is $10 per box. If the wage rate is $90.00 per day, Zippy will hire Assume that the selling price of paper is now $20 per box. workers. workers. If the wage rate remains at $90.00 per day, Zippy will hire workers. Marginal…arrow_forwardThe Zippy Paper Company has no control over either the price of paper or the wage it pays its workers. The following table shows the relationship between the number of workers Zippy hires and total output, with all other inputs being held constant. In the following table, for each quantity of labor input, fill in the marginal product (MP) and marginal revenue product (MRP) for Zippy. (Note: When the price doubles, this will also double the marginal revenue product.) Labor Input Total Output Marginal Product Marginal Revenue Product (Workers per day) (Boxes of paper per day) (Boxes of paper per day) Price = $10 Price = $20 (Dollars) (Dollars) 0 0 1 25 2 45 3 60 4 70 5 75 6 77 Assume that the selling price of paper is $10 per box. If the wage rate is $125.00 per day, Zippy will hire ______workers. Continue to assume that the selling…arrow_forwardQ76arrow_forward
- Question 6arrow_forwardTim works 51 hours per week, and his wage is $20 per hour. If his wage increases to $40 per hour, and his labor supply curve is downward-sloping, this means:arrow_forwardHomework (Ch 18) Consider a company operating in a competitive market. The company sells units of output and receives a price of $30 per unit, and pays a daily market wage of $285 to each worker it employs. In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers. Labor (Number of workers) Marginal Product of Labor (Units of output) Value of the Marginal Product of Labor (Dollars) GE (Dollars per worker) 1 500 A 450 400 350 N 300 250 Q 200 On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show the wage rate. (Note: If you cannot place the wage rate at the level you want, move the two end points individually.) Hint: Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product for the first worker should be plotted with a…arrow_forward
- Why does the learning curve apply mainly to direct rather than indirect labor?arrow_forwardThe following table shows the production function for a company. This company sells its product in a perfectly competitive product market at a price of $4 each and hire labor in a perfectly competitive labor market at a wage of $450 per week. Calculate the Marginal MarginalProduct of the 1st, 2nd, and 3rd. Calculate the Value ofMarginal Product of the 1st, 2nd, and 3rd How many workers should it hire? How do you know? Explain your answer. Show formulas and some of your calculations.arrow_forwardGive typing answer with explanation and conclusion If quasi-fixed labour costs are very high, employers may try to meet their labour demand needs by: a) making their existing workers work overtime b) hiring more workers. c) Increasing the intensity of work effort d) Cutting the variable labour costs e) starting a work-sharing programarrow_forward
- Solve it correctly please. Iarrow_forwardThe price of factor A is GHC20 per unit and the price of factor B is GHC300.00 per unit.The marginal product of factors A is 40units and the marginal product of factor B is 60units.Should the firm increase the employment of factor A and decrease the employment of B to minimize the total long run cost of producing existing output?Explainarrow_forwardExplain why firms will experience diminishing marginal returns to labor in the short run.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, IncMicroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningEconomics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning