a)
The correctly labeled graph when the
a)
Explanation of Solution
When the price of the product being produced decreases by assuming ceteris paribus Then, the labeled graph will show the curves as follows:
When the price of the product is decreased, then the labor
Introduction: A demand curve is a graphical representation that shows how sensitive demand is toward the price of a good or service.
Labor is the human capital or human resource that is the factor of production for any firm.
b)
The correctly labeled graph when worker productivity increases by assuming ceteris paribus
b)
Explanation of Solution
When the worker productivity increases and other things remain unchanged, then the demand for labor will shift to the right because when the workforce is well-trained only then the employers will hire them otherwise, they will not be hired from the large pool of labor.
Therefore, the demand for labor on graphical curves will be shown as follows:
Introduction: A demand curve is a graphical representation that shows how sensitive demand is toward the price of a good or service.
Labor is the human capital or human resource that is the factor of production for any firm.
c)
The correctly labeled graph when firms invest in more capital to be used by workers by assuming ceteris paribus
c)
Explanation of Solution
When firms invest in more capital to be used by workers by assuming other things remain the same, the labor for demand shifts to the right because the demand for labor depends on the demand for goods and services in the market. When a firm invests in the capital, it shows there is more demand for goods and services which in turn increase the demand for labor in the market.
Therefore, the demand for labor would be represented on the graph as follows:
Introduction: A demand curve is a graphical representation that shows how sensitive demand is toward the price of a good or service.
Labor is the human capital or human resource that is the factor of production for any firm.
Chapter 69 Solutions
Krugman's Economics For The Ap® Course
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- The following table provides information on two technology companies, IBM and Cisco. Use the data to answer the following questions. Company IBM Cisco Systems Stock Price Dividend (trailing 12 months) $150.00 $50.00 $7.00 Dividend (next 12 months) $7.35 Dividend Growth 5.0% $2.00 $2.15 7.5% 1. You buy a futures contract instead of purchasing Cisco stock at $50. What is the one-year futures price, assuming the risk-free interest rate is 6%? Remember to adjust the futures price for the dividend of $2.15.arrow_forward5. Consider a one-year European-style call option on Cisco stock. The strike is $50.85, which is the forward price. The risk-free interest rate is 6%. Assume the stock price either doubles or halves each period. The price movement corresponds to u = 2 and d = ½ = 1/u. S1 = $100 Call payoff= SO = $50 S1 = $25 Call payoff= What is the call payoff for $1 = $100? What is the call payoff for S1 = $25?arrow_forwardMC The diagram shows a pharmaceutical firm's demand curve and marginal cost curve for a new heart medication for which the firm holds a 20-year patent on its production. Assume this pharmaceutical firm charges a single price for its drug. At its profit-maximizing level of output, it will generate a total profit represented by OA. areas J+K. B. areas F+I+H+G+J+K OC. areas E+F+I+H+G. D. - it is not possible to determine with the informatio OE. the sum of areas A through K. (...) Po P1 Price F P2 E H 0 G B Q MR D ōarrow_forward
- Price Quantity $26 0 The marketing department of $24 20,000 Johnny Rockabilly's record company $22 40,000 has determined that the demand for his $20 60,000 latest CD is given in the table at right. $18 80,000 $16 100,000 $14 120,000 The record company's costs consist of a $240,000 fixed cost of recording the CD, an $8 per CD variable cost of producing and distributing the CD, plus the cost of paying Johnny for his creative talent. The company is considering two plans for paying Johnny. Plan 1: Johnny receives a zero fixed recording fee and a $4 per CD royalty for each CD that is sold. Plan 2: Johnny receives a $400,000 fixed recording fee and zero royalty per CD sold. Under either plan, the record company will choose the price of Johnny's CD so as to maximize its (the record company's) profit. The record company's profit is the revenues minus costs, where the costs include the costs of production, distribution, and the payment made to Johnny. Johnny's payment will be be under plan 2 as…arrow_forwardWhich of the following is the best example of perfect price discrimination? A. Universities give entry scholarships to poorer students. B. Students pay lower prices at the local theatre. ○ C. A hotel charges for its rooms according to the number of days left before the check-in date. ○ D. People who collect the mail coupons get discounts at the local food store. ○ E. An airline offers a discount to students.arrow_forwardConsider the figure at the right. The profit of the single-price monopolist OA. is shown by area D+H+I+F+A. B. is shown by area A+I+F. OC. is shown by area D + H. ○ D. is zero. ○ E. cannot be calculated or shown with just the information given in the graph. (C) Price ($) B C D H FIG шо E MC ATC A MR D = AR Quantityarrow_forward
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