Labor Economics
7th Edition
ISBN: 9780078021886
Author: George J Borjas
Publisher: McGraw-Hill Education
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Chapter 3, Problem 5P
To determine
Explain the changes of employment in a competitive firm that experiences a technological shock.
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What happens to employment in a competitive firm that experiences a technology shock such that at every level of employment its output is 200 units per hour greater than be fore?
Please use the following information and use it to complete a few calculations, and answer questions in your paper. The paper ought to be written as a brief (1-1.5 pages) report that includes your calculations and a short explanation of what the firm should do if it is making a loss. A firm currently uses 40,000 workers to produce 100,000 units of output per day. The daily wage per worker is $80, and the price of the firm's output is $41. The cost of other variable inputs is $400,000 per day. Assume that total fixed cost equals $900,000. (Note: Assume that output is constant at the level of 100,000 units per day.) Calculate the values for the following variables using the formulas that are given: · Total Variable Cost = (Number of Workers x Worker’s Daily Wage) + Other Variable Costs · Total Costs = Total Variable Costs + Total Fixed…
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