Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 17, Problem 1RQ
To determine
The reason for higher level of wage in the developed country.
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1. The demand for labor
Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley's
production schedule for strawberries is given in the following table:
Labor Input
Total Output
(Number of workers) (Pounds of strawberries)
0
WAGE RATE (Dollars per worker)
300
Suppose that the market wage for strawberry pickers is $170 per worker per day, and the price of strawberries is $12 per pound.
270
On the following graph, use the blue points (circle symbol) to plot Live Happley's labor demand curve when the output price is $12 per pound.
Note: Remember to plot each point between the two integers. For example, when the number of workers increases from 0 to 1, the marginal revenue
product of the first worker should be plotted with a horizontal coordinate of 0.5, the value halfway between 0 and 1. Line segments will automatically
connect the points.
240
210
180
150
120
90
60
30
1
0
2
3
4
5
0
0
18
34
48
60
70…
Ian works at an iron smelter in Pittsburgh, the center of iron
production in America. Due to the difficulty in measuring
the productivity of individual employees, Ian's employer as
well as the other iron smelters all pay an efficiency wage.
Adjust the wage line on the graph to reflect this situation.
What characteristic of efficiency-wage jobs is not
supported by the situation shown in the graph?
The wage rate will eventually return to the
market-clearing level.
Efficiency wages result in an increase in the rate
of unemployment.
Elevated wages serve as an economic incentive to
work harder.
Efficiency wage jobs result in a surplus of workers at
the wage being offered.
Wage ($ per hour)
Wage
Quantity of workers (in thousands)
S
O
A craft chocolate producer considers hiring one extra worker in production. Currently, the shop is selling 200 chocolate bars per day at a price of $6. With one extra worker, the manager estimates that they would be able to increase the output to 250 chocolate bars per day and that they would need to lower the price to $5.50 in order to sell them. The daily salary of this new employee would be the same as for the existing ones: $150. What should the manager do?
Group of answer choices
Reduce the number of workers working in his chocolate place
Increase its selling price
Turn down the new worker and maintain the same number of employees
Increase the salary of all employees
Hire the extra worker
Chapter 17 Solutions
Economics (Irwin Economics)
Ch. 17.3 - Prob. 1QQCh. 17.3 - Prob. 2QQCh. 17.3 - Prob. 3QQCh. 17.3 - Prob. 4QQCh. 17.A - Prob. 1ADQCh. 17.A - Prob. 2ADQCh. 17.A - Prob. 3ADQCh. 17.A - Prob. 4ADQCh. 17.A - Prob. 5ADQCh. 17.A - Prob. 1ARQ
Ch. 17.A - Prob. 2ARQCh. 17.A - Prob. 3ARQCh. 17.A - Prob. 4ARQCh. 17.A - Prob. 1APCh. 17.A - Prob. 2APCh. 17 - Prob. 1DQCh. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQCh. 17 - Prob. 6DQCh. 17 - Prob. 7DQCh. 17 - Prob. 8DQCh. 17 - Prob. 9DQCh. 17 - Prob. 10DQCh. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 1PCh. 17 - Prob. 2PCh. 17 - Prob. 3PCh. 17 - Prob. 4PCh. 17 - Prob. 5P
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