EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Chapter 13.1, Problem 1MQ
To determine
Whether workforce working under
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The following table shows the relationship between workers and output for a factory in the short run, with capital held constant. This firm is a monopoly in the output market, and price and marginal revenue for the
firm are also given in the table. Find the marginal revenue product of labor (MRPL).
Marginal Physical Product (MPPL)
Labor Input
0
1
2
3
4
5
If the wage rate is $408, this firm will hire
0
20
14
12
9
3
workers. In general, a monopolist will employ
Price of Output
(P)
40
39
38
37
36
35
Marginal Revenue (MR)
38
36
34
32
30
workers than a similar competitive firm.
MRPL
760
504
408
288
90
Imagine there is a firm that only uses labor to produce goods and that its production function is given by Y(L)=5L-L^2. The price of the firm’s output is equal to 1. Let’s assume the firm is a price taker on the product market but is a local monopsony for employment. Imagine that its marginal cost is given by 2+L. Imagine that labor supply is given by 1+L
How much labor does the firm want to use?
What will be the wage it pays?
How many people will work if the government imposes a minimal wage of 2.25?
How will this affect the firm’s profit? Calculate and compare before and after the introduction of the minimum wage.
Consider the housing construction industry. Assume that the industry is perfectly competitive in both input and output markets. Suppose that, through
collective bargaining, a labor union negotiates an industry-wide wage for various kinds of labor (electricians, plumbers, and so on). In particular, it
succeeds in negotiating a wage increase for carpenters from $15 to $20 per hour.
The following graph shows the labor demand of an individual firm.
On the following graph, show what happens at the firm level as a result of the union negotiations.
WAGE RATE
30
25
20
10
5
0
0
12
36
48
QUANTITY OF LABOR
24
Supply
Demand
60
72
Demand
Supply
?
Chapter 13 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 13.1 - Prob. 1MQCh. 13.1 - Prob. 2MQCh. 13.2 - Prob. 1TTACh. 13.2 - Prob. 2TTACh. 13.3 - Prob. 1MQCh. 13.3 - Prob. 2MQCh. 13.5 - Prob. 1MQCh. 13.6 - Prob. 1MQCh. 13.6 - Prob. 1TTACh. 13.6 - Prob. 2TTA
Ch. 13.6 - Prob. 1.1TTACh. 13.6 - Prob. 2.1TTACh. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Prob. 5RQCh. 13 - Prob. 6RQCh. 13 - Prob. 7RQCh. 13 - Prob. 8RQCh. 13 - Prob. 9RQCh. 13 - Prob. 10RQCh. 13 - Prob. 13.1PCh. 13 - Prob. 13.2PCh. 13 - Prob. 13.3PCh. 13 - Prob. 13.4PCh. 13 - Prob. 13.5PCh. 13 - Prob. 13.6PCh. 13 - Prob. 13.7PCh. 13 - Prob. 13.8PCh. 13 - Prob. 13.9PCh. 13 - Prob. 13.10P
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