Michael Parkin
ISBN #9780133872279
12th Edition
839 Questions
Homework Questions
Labor markets function as platforms where households offer labor services and firms compete for these services, with wages determined by the interplay of supply and demand. Critical to understanding these markets is the concept of the value of marginal product, which guides profit-maximizing hiring decisions. Additionally, market structures such as competitive markets, unionized sectors, and monopsonies profoundly influence wage outcomes and employment levels. External influences like technology changes, output prices, and policies like minimum wage laws further shift labor demand and supply curves, affecting market equilibrium.
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Tim is opening a new online store. He plans to hire two workers at $\$ 10$ an hour. Tim is also considering buying or leasing some new computers. The purchase price of a computer is $\$ 900$ and after three years it is worthless. The annual cost of leasing a computer is $\$ 450$ a. In which factor markets does Tim operate? b. What is the price of the capital equipment and the rental rate of capital?
Wanda's is a fish store that hires students to pack the fish. Students can pack the following amounts of fish: $$\begin{array}{cc} \begin{array}{c} \text { Number of } \\ \text { students } \end{array} & \begin{array}{c} \text { Quantity of fish packed } \\ \text { (pounds) } \end{array} \\ \hline 1 & 20 \\ 2 & 50 \\ 3 & 90 \\ 4 & 120 \\ 5 & 145 \\ 6 & 165 \\ 7 & 180 \\ 8 & 190 \end{array}$$ The fish market is competitive and the price of fish is $50 \mathrm{c}$ a pound. The market for packers is competitive and their market wage rate is $\$ 7.50$ an hour. Calculate the value of marginal product of labor and draw the value of marginal product curve.
Wanda's is a fish store that hires students to pack the fish. Students can pack the following amounts of fish: $$\begin{array}{cc} \begin{array}{c} \text { Number of } \\ \text { students } \end{array} & \begin{array}{c} \text { Quantity of fish packed } \\ \text { (pounds) } \end{array} \\ \hline 1 & 20 \\ 2 & 50 \\ 3 & 90 \\ 4 & 120 \\ 5 & 145 \\ 6 & 165 \\ 7 & 180 \\ 8 & 190 \end{array}$$ The fish market is competitive and the price of fish is $50 \mathrm{c}$ a pound. The market for packers is competitive and their market wage rate is $\$ 7.50$ an hour. a. Find Wanda's demand for labor curve. b. How many students does Wanda's employ?
The market price of fish falls to 33.33 \& a pound, but the packers' wage rate remains at $\$ 7.50$ an hour. How does the students' marginal product change? How does the value of marginal product of labor change?
The market price of fish falls to 33.33 \& a pound, but the packers' wage rate remains at $\$ 7.50$ an hour. How does Wanda's demand for labor change? What happens to the number of students that Wanda employs?