Suppose that the labor demand is given by the equation L= 4000 -20W, where L is...

Suppose that the labor demand is given by the equation L= 4000 -20W, where L is the number of legal assistants and W is the daily wage. If W=$80, calculate the own wage elasticity of labor demand. Is the demand for legal assistants elastic or inelastic at this point?

Suppose that the wage rose to $150. Calculate the own wage elasticity of labor demand. Is the labor demand elastic or inelastic at this point?

Expert Solution

Rahul Sunny answered 2 years ago

Suppose that Labor Supply is given by: L Supply = 5w Labor Demand had been such...

Suppose that Labor Supply is given by: L Supply = 5w Labor Demand had been such that the equilibrium wage rate was $20; however, a negative shock hit labor demand so that the new Labor Demand is given by: L Demand = 55 - 0.5w Suppose that the shock to labor demand affected only the labor demand curve's intercept and not its slope. What must have been the pre-shock intercept for labor demand (ie the quantity of labor demanded if...

Suppose the demand for lychees is given by the following equation:Qd = 4000 –100P + 500PM...

Suppose the demand for lychees is given by the following equation:Qd = 4000 –100P + 500PM ,where P is the price of lychees and PM is the price of mangoes. a) What happens to the demand for lychees when the price of mangoes goes up? Are lychees and mangoes substitutes or complements? b) Graph the demand curve for lychees when PM= 2.Now suppose that the quantity of lychees supplied is given by the following equation:Qs = 1500P –60R ,where R...

22. Consider a labor market where the demand for a particular category of labor is given...

22. Consider a labor market where the demand for a particular category of labor is given by the equation LD = 20 – 2W. Suppose that the supply curve of workers in this market who are also native-born citizens is given by LN = 2W, while the supply curve of immigrants in this market is given by LI = W, where L represents the number of workers, W is the wage expressed in real terms, and the subscripts D, N,...

Suppose the demand for fast food workers can be defined a labor demand equation of LD...

Suppose the demand for fast food workers can be defined a labor demand equation of LD = 95-3w. All fast food workers are covered by the minimum wage and it is binding. Will an increase in the minimum wage from $7.25 to $9.00 per hour increase, decrease, or have no effect on the aggregate earnings of fast food workers?

Suppose that the marginal product of labor is: MP = 100 – L, where L is the number of workers hired.

Suppose that the marginal product of labor is: MP = 100 – L, where L is the number of workers hired. You can sell the product in the marketplace for $50 per unit and the wage rate for labor is $100. How many workers should you hire?

Suppose an individual’s weekly labour supply is given by L = -10 + w, where L...

Suppose an individual’s weekly labour supply is given by L = -10 + w, where L is labour supply in hours and w is the hourly after-tax wage. Assume that firms are willing to pay a before-tax wage of $40/hr. In the absence of taxation, how many hours per week will the individual work? What are weekly earnings? Illustrate the choice in a diagram. [4] Suppose the government institutes a 25% tax on labour income. What is the after tax...

Suppose the market demand for broccoli is given by Demand: Q = 1000 – 5P Where...

Suppose the market demand for broccoli is given by Demand: Q = 1000 – 5P Where Q is quantity measured in 100s of bushels and P is price per hundred bushels. The market supply is given by Supply: Q = 4P – 80 What is the equilibrium price and quantity? How much is spent on broccoli? What is consumer and producer surplus? Describe the impact of a $150 per hundred bushel price floor on broccoli. (How many bushels would be...

Consider the case where the demand curve and supply curve for unskilled labor are given in...

Consider the case where the demand curve and supply curve for unskilled labor are given in the following table: (1) Wage Rate (/hour) (2) Wage Rate2 (/hour) (employer pays tax) (3) Q of Labour Demanded (hrs/week) (4) Wage Rate2 (/hour) (5) Q of Labour Supplied (hrs/week) 8.5 10 1000 1900 8 9.5 1200 1800 7.5 9 1400 1700 7 8.5 1600 1600 6.5 8 1800 1500 6 7.5 2000 1400 5.5 7 2200 1300 Employment insurance premium is paid in...

The demand equation for video games is given by x = 320 − 10p where x...

The demand equation for video games is given by x = 320 − 10p where x is the number of video games and p is in dollars. Find the value of p that maximizes the total revenue.

Suppose the market demand for dolls is given by the following equation: Qd = 100 -...

Suppose the market demand for dolls is given by the following equation: Qd = 100 - 1.5xP + 0.6xP(sub) - 0.4xP(comp) + 8xInc, where Qd = number of units (dolls) demanded per period P = price per doll P(sub) = the price of a substitute good P(comp) = the price of a complement good Inc = an index of consumers income At present P = $10, P(sub) = $5, P(comp) = $15, & Inc = 41. As a result the...

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