no handwritten notes Consider the housing construction industry. Assume that the industry is perfectly competitive in both input and output markets. Suppose that, throughcollective bargaining, a labour union negotiates an industry-wide wage for various kinds of labour (electricians, plumbers, and so on). In particular, itsucceeds in negotiating a wage increase for carpenters from $12 to $16 per hour.The following graph shows the labour demand of an individual firm.On the following graph, show what happens at the firm level as a result of the union negotiations.WAGE RATE (Dollars per hour)24200010SupplyDemand204030QUANTITY OF LABOUR (workers)5060Now consider the effects of the wage change on the entire industry.DemandSupply(? Use the graph input tool to help you answer the following questions. You will not be scored on any changes you make to this graph.Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.WAGE RATE (Dollars per hour)0Supply30Demand5010 2040QUANTITY OF LABOUR (Thousands of workers)60Graph Input ToolWage Rate(Dollars per hour)QuantityDemanded(Thousands ofworkers)Surplus(Thousands ofworkers)Demand ShifterPro-UnionAdvertising(Millions of dollars)The union's wage increase from $12 to $16 per hour causes a surplus ofworkers.)123000Quantity Supplied(Thousands ofworkers)Shortage(Thousands ofworkers)?300workers. (Note: Be sure to enter your answer in thousands ofSuppose that the union, in order to mitigate the unemployment caused by the wage increase, bolsters demand by rolling out a "Buy Union" advertisingcampaign. If the union spends $4 million on the campaign, the surplus of labour will beworkers. (Note: Be sure to enter your answerin thousands of workers.)

Labor demand and supply refer to the interaction between employers (firms or businesses) and workers…

Consider the housing construction industry. Assume that the industry is perfectly competitive in both input and output markets. Suppose that, through collective bargaining, a labour union negotiates an industry-wide wage for various kinds of labour (electricians, plumbers, and so on). In particular, it succeeds in negotiating a wage increase for carpenters from $12 to $16 per hour. The following graph shows the labour demand of an individual firm. On the following graph, show what happens at the firm level as a result of the union negotiations.

Consider the housing construction industry. Assume that the industry is perfectly competitive in both input and output markets. Suppose that, through collective bargaining, a labour union negotiates an industry-wide wage for various kinds of labour (electricians, plumbers, and so on). In particular, it succeeds in negotiating a wage increase for carpenters from $12 to $16 per hour. The following graph shows the labour demand of an individual firm. On the following graph, show what happens at the firm level as a result of the union negotiations.

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 3PA

See similar textbooks

Similar questions

11:16 Fri 10O Dec * 9 80% ... managebac-prod-china.s3.cn-north-1.amazonaws.com.cn A 22 of 46 AP Microeconomics Page 21 of 46 AP CollegeBoard Test Booklet Unit 5 Problem Set - FRQ's Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to "Calculate," you must show how you arrived at your final answer. The table below shows the short-run production function for Josh's Consulting Firm. Number of Consultants Total Product per Hour 1 21 2 43 3 66 4 88 108 6. 126 7 141 8. 151 (a) After which consultant do diminishing marginal returns begin for Josh's Consulting Firm? Explain using numbers. (b) Assume Josh's Consulting Firm sells its consulting services in a perfectly competitive market at a unit price of $2. Calculate the marginal revenue product of the fifth consultant. Show your work. (c) Josh's Consulting Firm hires…
Explain how the marginal cost of labor (MCL) curves differ between a firm in a perfectly competitive input market and a firm in a non-perfectly competitive input market, and illustrate on a graph.
Suppose LA.Banana employs workers to harvest bananas. Answer the following questions using the information provided below: Quantity of labour: 0 labour 1 labour 2 labour 3 labour 4 labour 5 labour 6 labour Units of Output: 0 banana 16 banana 21 banana 25 banana 31 banana 36 banana 40 banana a.) Calculate the marginal product of labor, the value of the marginal product of labor, and the marginal profit ,suppose a fully competitive company, LA"Banana, where wages are fixed at $800 and each banana (output) sells for $20.
Table 18-8 The following table shows the production function for a particular business. The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis. Labor Output 0 0 70 130 180 220 250 123 4 5 Refer to Table 18-8. Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day. How many workers should this firm hire to maximize its profit? 2 workers 3 workers 4 workers 5 workers
Gopher Excavators produces shovels in a small factory and sells the shovels in a competitive market. The following table shows the company's production function: Labor Output (Shovels) (Number of workers) 0 0 1 100 2 195 3 275 4 340 5 380 Use the blue points (circle symbol) to plot the production function for Gopher Excavators on the following graph. (?) 400 O -O- 360 Production Function 320 280 240 200 160 120 80 40 0 O 0 2 2 5 LABOR (Number of workers) Calculate the marginal product of labor (MPL) of each worker, and then plot the MPL curve on the following graph using the blue points (circle symbol). Note: Remember to plot each point halfway between two integers. For example, when the number of workers increases from 0 to 1, the MPL of the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically connect the points. ? 100 90 80 70 60 50 40 30 20 OUTPUT (Shovels) MPL (Shovels per worker) 10 0 0 O 1 1 2…
The following table shows the number of pizzas that can be produced by a large pizza parlor employing various numbers of pizza chefs. Number of Chefs Number of Pizzas per Day 1 40 2 64 3 82 4 92 5 100 6 92 Find the marginal physical product schedule of the pizza chefs. Assuming a price of $9 per pizza, find the marginal revenue product schedule. If chefs are paid $100 per day, how many chefs will this pizza parlor employ? How would your answer…
WAGE RATE Aplia Homework: Labor Markets and Labor Unions 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 $24 to $32 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. Demand Demand Supply Supply 40 00 80 100 120 QUANTITY OF LABOR Now consider the effects of the wage change on the entire industry. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.…
What is a monopsony? What distinguishes a monopsony from a competitive employer of inputs
Consider a manufacturing firm in a labor market that isperfectly competitive. There are two kinds of workers: productiveworkers whose marginal revenue product is $48,000 per year, andlazy workers whose marginal revenue product is $40,000 per year. Itis difficult for the firm to differentiate between productive andlazy workers. A local college offers a new yearlong astronomy course. Althoughthe cost of tuition is the same for both types of workers, thepsychic cost of having to work hard and get a passing grade islower for productive workers because they are able to learn morequickly than lazy workers. Therefore, the cost of taking the class(including the cost of tuition as well as the psychic cost) is$5,000 per year for a productive worker and $10,000 per year for alazy worker. Because astronomy has little relevance tomanufacturing, taking the class does not increase or decrease aworker's productivity. The firm uses the class as a way to differentiate betweenproductive and lazy…
suppose Fred produces 500 litres of milk every day with 10 workers. the price of milk is $12 per litre, and each worker is paid $550 daily. if th margin product of the last worker employed is 40 litres of milk, explain whether Fred is maximizing his profit. If not, can Fred incrase his profit by employing more or fewer workers? If Fred buys more dairy cattles, how will it affect his demand for labor? Explain with a diagram.
Homework (Ch 18) Consider a company operating in a competitive market. The company sells units of output and receives a price of $30 per unit, and pays a daily market wage of $285 to each worker it employs. In the following table, complete the column for the value of the marginal product of labor (VMPL) at each quantity of workers. Labor (Number of workers) Marginal Product of Labor (Units of output) Value of the Marginal Product of Labor (Dollars) GE (Dollars per worker) 1 500 A 450 400 350 N 300 250 Q 200 On the following graph, use the blue points (circle symbol) to plot the firm's labor demand curve. Then, use the orange line (square symbols) to show the wage rate. (Note: If you cannot place the wage rate at the level you want, move the two end points individually.) Hint: Remember to plot each point halfway between the two integers. For example, when the number of workers increases from 0 to 1, the value of the marginal product for the first worker should be plotted with a…
I Collado Lumber Company is producing tons of lumber per day. The following table is the costs of production. The managers currently have six machines. The price of output is $5 per unit. The wage of the worker is $55 per worker. From economic theory, we know that the value of the marginal product is price times the marginal product of labor. According to economic theory, a worker should be hired if the value of the marginal product is greater than the marginal cost of hiring a worker. See the table below. Number of machines Number of workers Output The marginal product of labor VMP Wage Marginal cost of hiring an additional worker 6 0 0 xxx xxx $55.00 xxx 6 1 2 2 $10.00 $55.00 $55.00 6 2 14 12 $60.00 $55.00 $55.00 6 3 30 16 $80.00 $55.00 $55.00 6 4 42 12 $60.00 $55.00 $55.00 6 5 50 8 $40.00 $55.00 $55.00 6 6 56 6 $30.00 $55.00 $55.00 6…