Labor Economics
7th Edition
ISBN: 9780078021886
Author: George J Borjas
Publisher: McGraw-Hill Education
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Question
Chapter 3, Problem 9P
(a)
To determine
Identified the equilibrium wage, employment, and
(b)
To determine
Identify the number of workers who would lose their jobs, number of workers added to the jobs at the minimum hourly wage, and the unemployment rate.
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Students have asked these similar questions
Which of the following is likely to shift the labor supply curve to the right, assuming all else equal?
A rise in the wage rate
A fall in the wage rate
A rise in the immigration of workers in search of better work opportunities
A fall in the population of a country due to a natural disaster
Which of the following is not correct?
In a labor market, the wage adjusts to balance the supply and demand for labor.
A profit-maximizing firm hires workers so long as the wage rate exceeds the value of the marginal product of labor.
Any event that changes the supply or demand for labor must change the equilibrium wage.
Any event that changes the supply or demand for labor must change the value of the marginal product.
(1) If the demand for product Y increases significantly, then
A- the demand for the labor used to make Y decreases. B-the quantity of labor supplied to produce Y will decrease. C-the supply of labor to produce Y will increase. D-only the quantity demanded of labor increases
E-the demand for the labor used to make Y increases
(2)If the wage in a perfectly competitive labor market is $15 and the marginal product of the last worker employed is 3 units, what must be the market price for the good being produced? Assume a perfectly competitive output market.
A- $5. B-$12. C-$15. D-$18. E-$45
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- The table below shows levels of employment (Labor), the marginal product at each of those levels, and the price at which the firm can sell output in a perfectly competitive market. Labor Marginal Product of Labor Price of the Product Value of the Marginal Product 1 7 $3 6 $3 3 $3 4 4 $3 3 $3 a) Complete the table finding the Value of the Marginal Product (show your work!). b) If the wage rate is $15, what is the firm's profit maximizing level of employment? JUSTIFY your answer! 2.arrow_forwardWhich of the following would increase the supply of labor? There’s a decrease in the number of workers The amounts of capital firms have increases The productivity of workers increases Immigration increases the number of workersarrow_forwardIn an industry that requires workers with specific skills, initially the market for labor is in equilibrium. Then a government-sponsored training program increases the number of qualified workers. In that scenario, equilibrium wage __________ and the quantity of workers employed __________.arrow_forward
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