Question
In: Economics
To say that a firm is competitive in the labor market is to say that the...
To say that a firm is competitive in the labor market is to say that the firm can choose
| a. |
the wage it pays its workers, but it cannot choose how many workers to hire. |
|
| b. |
the number of workers it hires, but it cannot choose the wage it pays its workers. |
|
| c. |
both the wage it pays its workers and the number of workers it hires. |
|
| d. |
neither the wage it pays its workers nor the number of workers it hires. |
Solutions
Expert Solution
The correct option is B) the number of workers it hires, but it cannot choose the wage it pays its workers.
The labor market is the term that economists use for all the different markets for labor. In a perfectly competitive labor market, firms can hire all the labor they want at the going market wage. Therefore, they hire workers up to the point L1 where the going market wage equals the value of the marginal product of labor.
Rahul Sunny answered 2 years agoRelated Solutions
Compared to a competitive labor market, a firm with monopsony power in the labor market would...
Compared to a competitive labor market, a firm with monopsony
power in the labor market would pay a
A. higher wage rate and hire more workers.
B. higher wage rate and hire fewer workers.
C. lower wage rate and hire more workers.
D. lower wage rate and hire fewer workers.
E. lower wage rate but hire the same amount of workers.
A. Minimum Wage in a Single Competitive Labor Market In a single competitive labor market, the...
A. Minimum Wage in a Single Competitive Labor Market In a single
competitive labor market, the labor demand and labor supply curves
are
LD = 200 − 20w
LS = 50 + 10w
where we measure labor in terms of workers per hour, and the
hourly wage is measured in dollars per worker.
(a) Solve each equation for the wage w, and plot the resulting
inverse labor demand and labor supply curves. Identify the
market-clearing equilibrium.
(b) The government imposes...
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...
Suppose we have a competitive labor market. What is the marginal benefit to the firm...
Suppose we have a competitive labor market.
What is the marginal benefit to the firm of hiring another
worker? Explain why.
What is the marginal cost to the firm of hiring another
worker?
How does the firm decide how many workers to hire in the short
run?
In the long run, capital is no longer fixed Explain how this
changes the labor decision for the firm.
What is the main difference between labor demand in the short
run and...
ATVs are produced in a competitive labor. Labor demand in this market is given by ??...
ATVs are produced in a competitive labor. Labor demand in this
market is given by ?? = 100 − ? and labor supply is given by ?? =
25 + 4?. Given the high number of on-the-job injuries during
product testing, the government has decided that workers
irrationally underestimate the need for worker’s compensation
insurance coverage. The government is trying to choose whether to
provide worker’s compensation through a payroll tax, or to mandate
that all firms in this market...
9. Show graphically the labor input decisions of the following situations: Competitive labor market and competitive...
9. Show graphically the labor input
decisions of the following situations:
Competitive labor market and competitive goods (commodity)
market
Competitive labor market and monopoly in the goods market
Monopsony in the labor market and competition in goods
market
Monopsony in the labor market and monopoly in the goods
market
Effect of unions on wages (union being a monopolistic seller in
labor market).
13. Show graphically the labor input decisions of the following situations: Competitive labor market and competitive...
13. Show graphically the labor input
decisions of the following situations:
Competitive labor market and competitive goods (commodity)
market
Competitive labor market and monopoly in the goods market
Monopsony in the labor market and competition in goods
market
Monopsony in the labor market and monopoly in the goods
market
Effect of unions on wages (union being a monopolistic seller in
labor market).
Show graphically the labor input decisions of the following situations: Competitive labor market and competitive goods...
Show graphically the labor input
decisions of the following situations:
Competitive labor market and competitive goods (commodity)
market
Competitive labor market and monopoly in the goods market
Monopsony in the labor market and competition in goods
market
Monopsony in the labor market and monopoly in the goods
market
Effect of unions on wages (union being a monopolistic seller in
labor market).
20. Let's say a product was traded in a fully competitive market and the market price...
20. Let's say a product was traded in a fully
competitive market and the market price of this product was given
at 50. The total cost function C=10+2Q+3Q2 indicating the
relationship between the total cost and output of this company was
given. Find the profit maximization output and profit margin.
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