« previous next »

Author Question: Suppose that a mining company employs 80 of the available laborers in a town. Explain what will ... (Read 87 times)

mikaylakyoung

  • Hero Member
  • *****
  • Posts: 531
on: Jul 1, 2018
Suppose that a mining company employs 80 of the available laborers in a town. Explain what will happen to the number of laborers hired and the wage rate paid by the mine if a minimum wage is set at the competitive level.
 
  What will be an ideal response?

Question 2

Suppose a monopoly producer is also a monopsonist in the labor market. Demand for the output is p = 100 - Q. The production function is Q = L, and the labor supply curve is w = 10 + L. How much labor does the firm hire? What wage is paid?
 
  What will be an ideal response?
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


izzat

  • Sr. Member
  • ****
  • Posts: 328
Reply #1 on: Jul 1, 2018
Answer to Question 1

The mine was operating as a monopsony. The competitive minimum wage will result in the mine hiring a competitive level of laborers at the higher competitive wage.

Answer to Question 2

The firm's marginal revenue product of labor is MRP = 100 - 2L. Marginal expenditure is 10 + 2L. Setting them equal yields 10 + 2L = 100 - 2L or L = 90/4 = 22.5 units of labor, for which the firm will pay a wage of (10 + L) = 32.5.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Bacteria have been found alive in a lake buried one half mile under ice in Antarctica.

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates's recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

Did you know?

Most childhood vaccines are 90–99% effective in preventing disease. Side effects are rarely serious.

Did you know?

Atropine, along with scopolamine and hyoscyamine, is found in the Datura stramonium plant, which gives hallucinogenic effects and is also known as locoweed.

Did you know?

About 100 new prescription or over-the-counter drugs come into the U.S. market every year.

Creede, Colorado, circa 1890, a rough silver mining town that grew from 660 people in 1889 to over 1 Creede, Colorado, circa 1890, a rough silver mining town that grew from 660 people in 1889 to over 1
Strip Mining Strip Mining
U.S. Subsurface Coal Mining: Output, Price, and Output per Worker-Hour, 1949–1994 U.S. Subsurface Coal Mining: Output, Price, and Output per Worker-Hour, 1949–1994
Let f be a real function with domain R. Suppose that for each ǫ > 0, there is a continuous ... Let f be a real function with domain R. Suppose that for each ǫ > 0, there is a continuous ...
Suppose a country imports televisions. The country's supply and demand curves are shown in ... Suppose a country imports televisions. The country's supply and demand curves are shown in ...
Suppose a country imports televisions. The country's supply and demand curves are shown in ... Suppose a country imports televisions. The country's supply and demand curves are shown in ...
Video: Wound Care

For a complete list of videos, visit our video library