econmic questions, very simple

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HW3-Chapter5  Based on the Table below: (Answer to questions 1-4) Labor 0 Output 0 Price $2.20 2 29 1.80 1 3 15 42 4 54 5 65 2.00 1.60 1.40 1.20 1. Calculate marginal product, average product, marginal revenue product and value of marginal product. 2. If the wage is $20.00, how many workers will this profit-maximizing firm choose to employ? a. 2 b. 3. c. 4 d. 5 3. If the wage is $11.00, how many workers will this profit-maximizing firm choose to employ? a. 2 b. 3 c. 4 d. 5 4. Rather than the product demand schedule shown in the table, suppose this firm sold its output competitively for a price of $2.00. In this case, how many workers will this profit-maximizing firm choose to employ at a wage of $25.00? a. 2 b. 3. c. 4 d. 5 5. Which of the following best describes the substitution effect of a wage increase? a. b. c. d. The firm's marginal cost increases, the firm desires to produce less output, and therefore less labor is required The cost of labor is relatively higher, causing the firm to use relatively less labor The firm's labor demand curve becomes less elastic, causing it to employ less labor The firm's labor demand curve becomes more elastic, causing it to employ less labor 6. Compared to the long-run labor demand curve, the firm’s short-run curve is typically: a. less elastic c. more elastic b. d. the same more elastic only if labor and capital are gross complements 7. When deriving the market demand curve for a particular type of labor, one must: a. hold the market price of the output constant c. account for the variation in market price as industry output expands b. d. simply sum the labor demand curves of all employers of that type of labor hold constant the market price in competitive markets but allow the price to vary in monopoly markets 8. (World of Work 5-1) Since 1980, the number of jobs in manufacturing has: a. increased, reversing a downward trend that had started in 1950 c. decreased, reflecting in part the reduction in the labor force participation rate of older males and the drop in their real wages b. d. decreased, reflecting in part the reduced productivity of manufacturing workers decreased, reflecting in part the increased reliance of manufacturing on workers from temporary help agencies 9. Answer to questions, 2, 5, 7 at the end of Chapter 5
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HW3-Chapter5
Based on the Table below: (Answer to questions 1-4)
Labor
0

Output
Price
0
$2.20

1

15

2.00

2

29

1.80

3

42

1.60

4

54

1.40

5

65

1.20

1. Calculate marginal product, average product, marginal revenue product and value of

marginal product.
Solution
Marginal revenue = Change in output/ change in labor
Marginal revenue product = marginal revenue x price
Average product = output/ labor
The results can be summarized in the table below;

Labor

Output

Price

Average
product

Marginal
product

Marginal
revenue
product

0

0

2.20

0

1

15

2.00

15

15

30

2

29

1.80

14.5

14

25.2

3

42

1.60

14

13

20.8

4

54

1.40

13.5

12

16.8

5

65

1.20

13

11

15.6

0

2. If the wage is $20.00, how many workers will this profit-maximizing firm choose to

employ?
a.

2

b.

3.

c.

4

d.

Marginal
product

5

Labor

Output

Price

Average
product

Marginal
revenue
product

0

0

2.20

0

1

15

2.00

15

15

30

2

29

1.80

14.5

14

25.2

0

3

42

1.60

14

13

20.8

4

54

1.40

13.5

12

16.8

5

65

1.20

13

11

15.6

3. If the wage is $11.00, how many workers will this profit-maximizing firm choose to

employ?
a.

2

b.

3

c.

4

d.
Marginal
product

5

Labor

Output

Price

Average
product

Marginal
revenue
product

0

0

2.20

0

1

15

2.00

15

15

30

2

29

1.80

14.5

14

25.2

3

42

1.60

14

13

20.8

4

54

1.40

13.5

12

16.8

5

65

1.20

13

11

15.6

0

4. Rather than the product demand schedule shown in the table, suppose this firm sold its

output competitively for a price of $2.00. In this case, how many workers will this profitmaximizing firm choose to employ at a wage of $25.00?
a.

2

b.

3.

If price is $2, then the wage rate is $30

c.

4

d.

5

Therefore, marginal product = 30/2 = 15
If mp is 15, then the output is 1

Labor

Output

Price

Averag...


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Excellent resource! Really helped me get the gist of things.

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