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
The nation of Ectenia has 20 competitive apple orchards, all of which sell apples at the world price of $2 per apple. The following equations describe the production function and the marginal product of labor in each orchard:
Q=100 L-L2
MPL = 100-2L
Where Q is the number of apples produced in a day, L is the number of workers, and MPL is the marginal product of labor
a. What is each orchard's labor demand as a function of the daily wage W? What is the market's labor demand?
b.Ectenia has 200 workers who suply their labor inelastically. Solve for the wage W How many workers does each orchard hire ? How much profit does each orchard owner make?
c.Calculate what happens to the income of workers and orchard owners if the world price doubles to $4per apple.
d. Now suppose the price is back at $2 per apple, but a hurricane destroys half the orchards. Calculate how the hurricane affects the income of each worker and of each remaining orchard owner. What happens to the income of Ectenia as a…
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.
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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