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Chapter 28: Q.19 (page 647)

Suppose that we were to observe unemployment in the labor market depicted in Figure 28-4. Would this imply that the current wage rate is above or below the $1,000 equilibrium weekly wage rate in the figure? Explain briefly.

Short Answer

Expert verified

The current wage rate is above then the $1000 equilibrium weekly wage rate

Step by step solution

01

Given Information

The marginal product of info, say work, is characterized as the additional result that outcomes from adding one unit of the contribution to the current blend of useful elements.

02

Explanation

The employment demand is expanding at quite a quarterly wage level at$1000.Those very business needs will only be filled by one strong labour quantity with only a terrible worker pay. At the point when the week after week wage rate is over the harmony wage rate, the demand for work is given by Qd, while the inventory of work is given by Qs. Although may be used in the illustration,Qs>Qd. Accordingly, when week after week the wage rate is over the balance wage rate$1000, there will be joblessness in the work market.

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Most popular questions from this chapter

Consider Figure 28-7. Suppose that the monopolist is contemplating hiring 14 units of labor, which it knows would cause the marginal product to decline to 150 units of output per unit of labor. The product price also decreases to \(4.50 per unit, and the firm's marginal revenue declines to \)3.20 per unit. What would be the firm's marginal revenue product if it hires a 14th unit of labor?

The current wage rate is \(10, and the rental rate of capital is \)500. A firm's marginal product of labor is 200, and its marginal product of capital is 20,000 . Is the firm maximizing profits for the given cost outlay? Why or why not?

Since the beginning of this century, there has been a significant increase in the price of corn-based ethanol.

a. A key input in the production of com-based ethanol is com. Use an appropriate diagram to explain what has likely occurred in the market for corn if the supply curve has not shifted.

b. In light of your answer to part (a), explain why many hog farmers, who in the past used corn as the main feed input in hog production, have switched to cookies, licorice, cheese curls, candy bars, and other human snack foods instead of corn as food for their hogs.

Recently, Swedish companies have outsourced manufacturing labor previously performed by Swedish workers at \(20 per hour to U.S. workers who receive a wage rate of \)10 per hour. Evaluate the effects of Swedish manufacturing-labor outsourcing on Swedish and U.S. employment levels and wages.

Contrast wage determination under monopoly and perfect competition.
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