2. Plotting the supply of labor In Philadelphia, 180 people are willing to work an hour as hostesses if the wage is $10 per hour. For each additional $5 that the wage rises above $10, an additional 45 people are willing to work an hour. For wages of $10, $15, $20, $25, and $30 per hour, plot the daily labor supply curve for hostesses on the following graph. WAGE (Dollars per hour) 50 45 40 40 35 30 20 15 10 5 0 0 45 90 135 180 225 270 315 360 405 450 LABOR (Number of workers) Supply What is one explanation for why this labor supply curve is upward sloping over the range of wages from low wage to high wage? Labor production functions exhibit diminishing marginal returns. The opportunity cost of leisure increases as wages increase. People prefer to spend time doing leisure activities rather than working. Wages have to increase to accommodate union pressure.
2. Plotting the supply of labor In Philadelphia, 180 people are willing to work an hour as hostesses if the wage is $10 per hour. For each additional $5 that the wage rises above $10, an additional 45 people are willing to work an hour. For wages of $10, $15, $20, $25, and $30 per hour, plot the daily labor supply curve for hostesses on the following graph. WAGE (Dollars per hour) 50 45 40 40 35 30 20 15 10 5 0 0 45 90 135 180 225 270 315 360 405 450 LABOR (Number of workers) Supply What is one explanation for why this labor supply curve is upward sloping over the range of wages from low wage to high wage? Labor production functions exhibit diminishing marginal returns. The opportunity cost of leisure increases as wages increase. People prefer to spend time doing leisure activities rather than working. Wages have to increase to accommodate union pressure.
Chapter12: Labor Markets And Labor Unions
Section: Chapter Questions
Problem 1.1P
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