« previous next »

Author Question: Suppose that a mining company employs 80 of the available laborers in a town. Explain what will ... (Read 72 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?

Only 12 hours after an egg cell is fertilized by a sperm cell, the egg cell starts to divide. As it continues to divide, it moves along the fallopian tube toward the uterus at about 1 inch per day.

Did you know?

Although not all of the following muscle groups are commonly used, intramuscular injections may be given into the abdominals, biceps, calves, deltoids, gluteals, laterals, pectorals, quadriceps, trapezoids, and triceps.

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Did you know?

Individuals are never “cured” of addictions. Instead, they learn how to manage their disease to lead healthy, balanced lives.

Did you know?

A cataract is a clouding of the eyes' natural lens. As we age, some clouding of the lens may occur. The first sign of a cataract is usually blurry vision. Although glasses and other visual aids may at first help a person with cataracts, surgery may become inevitable. Cataract surgery is very successful in restoring vision, and it is the most frequently performed surgery in the United States.

One indication of the remarkable transformation of Harlem is town hall meetings. This one was held ... One indication of the remarkable transformation of Harlem is town hall meetings. This one was held ...
This headache remedy was “guaranteed” by the drug company; 1906. This headache remedy was “guaranteed” by the drug company; 1906.
Copper Mining Copper Mining
Helgeson Company has identified the following items for possible inclusion when taking a ... Helgeson Company has identified the following items for possible inclusion when taking a ...
A company that sells sweatshirts finds that the profit can be modelled by P(s)= ... A company that sells sweatshirts finds that the profit can be modelled by P(s)= ...
Explain the assumptions that must be satisfied in order to validly use the one-way ANOVA ... Explain the assumptions that must be satisfied in order to validly use the one-way ANOVA ...
Video: Homologous chromosomes during prophase I - Animation

For a complete list of videos, visit our video library