Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 17.A, Problem 2AP
Subpart (a):
To determine
The new union wage and the employment level in the economy.
Subpart (b):
To determine
Total wage per week and the wage after the increase.
Subpart (c):
To determine
Value of decrease in the total wages due to increase in wage rate.
Subpart (d):
To determine
Total decrease in wage.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
4. Suppose that low-skilled workers employed in clearing woodland can each clear one acre per month if each is equippedwith a shovel, a machete, and a chainsaw. Clearing one acrebrings in $1,000 in revenue. Each worker’s equipment coststhe worker’s employer $150 per month to rent and each workertoils 40 hours per week for four weeks each month. LO17.6 a. What is the marginal revenue product of hiring one lowskilled worker to clear woodland for one month?b. How much revenue per hour does each worker bring in?c. If the minimum wage were $6.20, would the revenue perhour in part b exceed the minimum wage? If so, by howmuch per hour?d. Now consider the employer’s total costs. These includethe equipment costs as well as a normal profit of $50 peracre. If the firm pays workers the minimum wage of$6.20 per hour, what will the firm’s economic profit orloss be per acre?e. At what value would the minimum wage have to be set sothat the firm would make zero economic profit fromemploying an…
Complete the following labor supply table for a firm hiring labor competitively: LO17.2
Show graphically the labor supply and marginal resource (labor) cost curves for this firm. Are the curves the same or different? If they are different, which one is higher?
Plot the labor demand data of review question 2 in Chapter 16 on the graph used in part a above. What are the equilibrium wage rate and level of employment?
. Suppose that a car dealership wishes to see if efficiency wages will help improve its salespeople’s productivity. Currently, each salesperson sells an average of one car per day while being paid $20 per hour for an eight-hour day. LO17.8
What is the current labor cost per car sold?
Suppose that when the dealer raises the price of labor to $30 per hour the average number of cars sold by a salesperson increases to two per day. What is now the labor cost per car sold? By how much is it higher or lower than it was before? Has the efficiency of labor expenditures by the firm (cars sold per dollar of wages paid to salespeople) increased or decreased?
Suppose that if the wage is raised a second time to $40 per hour the number of cars sold rises to an average of 2.5 per day. What is now the labor cost per car sold?
If the firm’s goal is to maximize the efficiency of its labor expenditures, which of the three hourly salary rates should it use: $20 per hour, $30 per hour, or $40 per hour?…
Chapter 17 Solutions
Microeconomics
Ch. 17.3 - Prob. 1QQCh. 17.3 - Prob. 2QQCh. 17.3 - Prob. 3QQCh. 17.3 - Prob. 4QQCh. 17.A - Prob. 1ADQCh. 17.A - Prob. 2ADQCh. 17.A - Prob. 3ADQCh. 17.A - Prob. 4ADQCh. 17.A - Prob. 1ARQCh. 17.A - Prob. 2ARQ
Ch. 17.A - Prob. 3ARQCh. 17.A - Prob. 4ARQCh. 17.A - Prob. 1APCh. 17.A - Prob. 2APCh. 17 - Prob. 1DQCh. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQCh. 17 - Prob. 6DQCh. 17 - Prob. 7DQCh. 17 - Prob. 8DQCh. 17 - Prob. 9DQCh. 17 - Prob. 10DQCh. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 1PCh. 17 - Prob. 2PCh. 17 - Prob. 3PCh. 17 - Prob. 4PCh. 17 - Prob. 5P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- 5 MC Qu. 16-35 (Algo) Refer to the given table.... Employment 0 1 2 3 4 S 6 Multiple Choice O O Total Product 0 Refer to the given table. If the firm is hiring workers under purely competitive conditions at a wage rate of $38, it will employ O O 12 22 30 36 40 42 Tworker 2 workers. 3 workers Product Price $5 Sworkers 5 5 5 5 5 5 0arrow_forward4. Inclusive, or industrial, unions - Negotiating a higher industry 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 $9 to $12 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. 18 15 Demand 12 Supply Supply Demand 3 10 15 20 25 30 QUANTITY OF LABOR ---- --- Co WAGE RATEarrow_forwardWhich statement is false regarding unions? O a) With unions successfully raising wages for workers, it can also reduce overall employment. b) When unions drive up wages for workers, it results in an incentive for firms to hire more workers. OC) Unions drive up wages and benefits for workers by asserting market power over employers. O d) It is possible that raising wages for union workers can lead to higher productivity than nonunion workers because union workers are more likely to stay on the job longer.arrow_forward
- Employment 0 1 2 3 4 5 6 O 4-5 workers. 3-4 workers. Product O 0-1 workers. O 5-6 workers. 0 6 11 15 18 20 21 Price 5 5 5 5 5 5 On the basis of the information in the table above, if the firm is hiring workers under purely competitive conditions at a wage rate of $10, it will choose to employ between: 5 Revenue MRParrow_forwardWorkers Pizza Fixed cost in $ per day per day Variable cost in S TC per day 400 per day [25 (75 400 200 6 00 750 850 400 350 450 115 400 145 400 600 lo00 1200 170 400 800 8. Referring to the table above, when the second worker is hired, the marginal cost per pizza is equal to: a) $3 b. $75 750-600 75-25 150 ATC %3D 5u C. $50 d. $150 Duutp Dout 際ATCarrow_forwardThe following labor market graph applies to questions 13-16. Consider the following competitive labor market situation before and after a tax is levied on labor suppliers. (This would be as if the companies did not withhold any taxes from workers' paychecks. The workers would always be the ones mailing in any taxes owed on their pay from the firms.) W wd Wo Ws Imp E L L₁ Lo D(no tax) D. (with tax) L 13. Before the tax is imposed, firms' surplus is given by the area A + B + C. This surplus measures O the workers' addition to profit. O how much the firm is paying the workers. O how much more the workers are getting paid compared the combined minima the workers are willing to work for. O the firms' combined revenues. O the size of the wage.arrow_forward
- Figure 13.5 Wage (S) 200- 180- 160- 140- 120- 100 80 60- 40 20 0 MR 10 20 30 40 50 60 70 80 Quantity of labor Reference: Ref 13-7 MC (Figure 13.5) The figure represents a labor union with wage in dollars and quantity of labor in hundreds of hours. If the labor union chooses to maximize total wages, how many workers will it supply? Select one: O A. 4,000 OB. 2,750 O C. 5,000 D. 8,000arrow_forwardWhich of the following is a method used by unions to increase the demand for their members' labor? O A. Decrease the marginal product of union members. O B. Oppose minimum wage laws. OC. Oppose immigration restrictions. O D. Support import restrictions. O E. Increase imported goods and servicesarrow_forwardEmployment 0 1 2 3 4 5 6 Labor Demand Data Total Product 0 15 28 о Multiple Choice о O $18 $17 39 48 55 60 $15 $16 Product Price $2.20 2.00 1.80 1.60 1.40 1. 20 1.00 The table shows labor demand data on the left and labor supply data on the right. What will be the profit-maximizing wage rate? Labor Supply Data Employment 0 1 2 3 4 LO 5 6 Wage Rate $15.00 16.00 17.00 18.00 19.00 20.00arrow_forward
- Number of Employees Total Production Marginal Product of Labor Marginal Revenue Product O 1 2 3 4 O Four employees O One employees O Three employees O OTwo employees 9 24 36 43 O 9 If the price of the item is $15.00 per unit and the employees cost $125 each, how many employees should the firm hire to maximize their profit? 15 12 7arrow_forwardFigure 3.2 Si 15 S2 10 5. D2 Di 20 30 40 Quantity of Labor In Figure 3.2, assume that we have labor market demand and supply curves of D2 and S1, respectively. What is the equilibrium wage and employment level? O $15; 30 workers O 5; 30 workers $5; 20 workers O $10; 40 workers Wage Rate ($ per day)arrow_forwardSuppose that the wage rate is $13 per hour and the price of the product is $2. Values for output and labor are in units per hour. b. L 0. 24 44 60 72 80 4 84 Find the profit-maximizing quantity of labor. (Assume the firm can hire up to 6 workers.) The profit-maximizing quantity of labor is worker(s). (Enter a numeric response using an integer.) Suppose that the price of the product remains $2 but that the wage rate increases to $36. Find the new profit maximizing level of L The profit-maximizing quantity of labor is worker(s). Suppose that the price of the product decreases to $1 and the wage remains at $13 per hour. Find the new profit-maximizing L.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax