Question

In: Economics

Consider a competitive labor market in which firms hire full-time workers according to the following labor...

Consider a competitive labor market in which firms hire full-time workers according to the following labor demand schedule: W = 100 – 2L, where L is the number of workers and W is the daily wage. The supply of labor is given by the equation W = 10 + L. The market wage is $40. $450 are generated per day in surpluss for firms that hire workers. Now suppose the government imposes a minimum daily wage of $60.(a) How many workers will be employed in this case? (b) How much is the reduction in total surplus caused by minimum wage?

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

9. Consider a competitive labor market in which firms hire full-time workers according to the following...
9. Consider a competitive labor market in which firms hire full-time workers according to the following labor demand schedule: W = 100 – 2L, where L is the number of workers and W is the daily wage. The supply of labor is given by the equation W = 10 + L. (a) What will be the market daily wage? (b) How much surplus is generated for firms that hire workers? Now suppose the government imposes a minimum daily wage of...
Consider a perfectly competitive market in which all firms areidentical. The market is in the...
Consider a perfectly competitive market in which all firms are identical. The market is in the long-run equilibrium, the market equilibrium price is P , and each firm produces   q units of good.The government decides to impose a tax of size T per unit of good.a)     After the tax is imposed, how would the market equilibrium price and quantity change in the short-run? How does the quantity produced by each firm change in the short-run? Illustrate your answers using a diagram....
1. The labor supply curve: a. is made up of firms who want to hire workers...
1. The labor supply curve: a. is made up of firms who want to hire workers at each given wage. b. is made up of workers who want to work for firms at each given wage. c. shows number of firms who are willing and able to hire workers at each given wage. d. shows that the number of firms who want to hire workers decreases as the wage increases. 2. Unemployment insurance: a. is an explanation for why wages...
Consider a perfectly competitive labor market in which the demand for labor is given by E...
Consider a perfectly competitive labor market in which the demand for labor is given by E = 24,000 – (2,000/3)W, and the supply of labor is given by E = –8,000 + 2,000W. In these equations, E is the number of employee-hours per day, and W is the hourly wage. a. What is the equilibrium number of employee-hours each day? employee-hours each day In equilibrium, what was the dollar value of the additional output generated by the last employee-hour hired...
Describe wage determination in a labor market in which workers are unorganized and many firms actively compete for the services of labor.
Describe wage determination in a labor market in which workers are unorganized and many firms actively compete for the services of labor. Show this situation graphically, using W1 to indicate the equilibrium wage rate and Q1 to show the number of workers hired by the firms as a group. Show the labor supply curve of the individual firm and compare it with that of the total market. Why are there differences? In the diagram representing the firm, identify total revenue,...
Consider a competitive market with 12 firms. 6 of these, which we call Type 1 firms,...
Consider a competitive market with 12 firms. 6 of these, which we call Type 1 firms, have the below cost structure:                              C₁(Q)=Q²+Q+5 and the remaining 6 firms, which we call Type 2 firms, have the following costs:                             C₂(Q)=0.5Q²+Q+20 The market demand is given by                             D(P)=183-3P Use this information for questions 1-17. 1) Derive the supply function of each Type 1 firm. Show all steps. 2) Derive the supply function of each Type 2 firm. Show all steps....
Market for unskilled labor is perfectly competitive: there are lots of potential workers and lots of...
Market for unskilled labor is perfectly competitive: there are lots of potential workers and lots of employers needing such work. Suppose supply of unskilled labor is given by Qs = 10W and demand for labor is given by Qd = 240−20W, where W is the hourly wage and Q is the number of hours (in thousands). Keep in mind that workers represent supply of labor, while firms are on the demand side here. (a) Find the equilibrium wage and number...
Which of the following conditions for a perfectly competitive labor market exists in actual labor markets?...
Which of the following conditions for a perfectly competitive labor market exists in actual labor markets? a. workers in a given occupation are identical b. workers have perfect information about the jobs and employers have perfect information about the workers. c. there is no market power with either the workers or employers d. All of the above. e. None of the above.
Consider the following cost information for a firm that operates in a perfectly competitive market. Labor...
Consider the following cost information for a firm that operates in a perfectly competitive market. Labor is a variable input. Q (quantity of output) Total cost ($) 0 15 1 25 2 45 3 75 4 110 5 165 6 225 OUTCOME #1: Suppose that the market price is $20. State the condition for the optimal quantity of output.   Using the condition, find the quantity of output that the firm should produce in the short run.    OUTCOME #2: In...
Consider the following cost information for a firm that operates in a perfectly competitive market.   Labor...
Consider the following cost information for a firm that operates in a perfectly competitive market.   Labor is a variable input.    Q (quantity of output) Total cost ($) 0 15 1 25 2 45 3 75 4 110 5 165 6 225 (1) As the firm increase the output from 1 unit to 2 units, does the marginal product of labor rise or fall?   Explain. (2) Suppose that the market price is $30. Find the optimal quantity of output that...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT