Use the table below to answer the following questions
|
Number
of
Workers
|
Total
Product
|
Marginal
Product
|
Average
Product
|
Price
|
MRP
|
MRC
|
Total
Labor
Cost
|
MFC
|
Marginal
Profit
|
|
27
|
270
|
|
|
$3.50
|
|
|
|
|
|
|
28
|
279
|
|
|
$3.50
|
|
$9.00
|
|
|
|
|
29
|
287
|
|
|
$3.50
|
|
$9.25
|
|
|
|
|
30
|
294
|
|
|
$3.50
|
|
$9.50
|
|
|
|
|
31
|
300
|
|
|
$3.50
|
|
$9.75
|
|
|
|
|
32
|
305
|
|
|
$3.50
|
|
$10.00
|
|
|
|
|
33
|
309
|
|
|
$3.50
|
|
$10.25
|
|
|
|
|
34
|
312
|
|
|
$3.50
|
|
$10.50
|
|
|
|
|
35
|
314
|
|
|
$3.50
|
|
$10.75
|
|
|
|
1. Complete the table above
2. A competitive labor market would hire workers at a wage of
3. Draw a graph illustrating the competitive markets hiring decision (two side-by-side graphs)
4. A mopsonistic labor market will hire workers at a wage of
5. Draw a graph illustrating the monopsonistic markets hiring decision (two side-by-side graphs)
7. Now suppose a labor union successfully negotiated a labor contract setting wages at $14. What would this do to the competitive labor market depicted in the above table?
8. Draw a corresponding graph to your answer for question 7.
9. Now suppose a labor union successfully negotiated a labor contract setting wages at $14. What would this do to the monopolistic labor market depicted in the above table?
10. Draw a corresponding graph to your answer for question 9.
11. Suppose the demand for the firm's product has increased due to a change in preferences. The increase in demand increased the price of the good to $4.50.
a. Complete the table below for the new price level.
|
Number
of
Workers
|
Total
Product
|
Marginal Product
|
Average
Product
|
Price
|
MRP
|
MRC
|
Total
Labor
Cost
|
MFC
|
Marginal
Profit
|
|
27
|
270
|
|
|
|
|
|
|
|
|
|
28
|
279
|
|
|
|
|
$9.00
|
|
|
|
|
29
|
287
|
|
|
|
|
$9.25
|
|
|
|
|
30
|
294
|
|
|
|
|
$9.50
|
|
|
|
|
31
|
300
|
|
|
|
|
$9.75
|
|
|
|
|
32
|
305
|
|
|
|
|
$10.00
|
|
|
|
|
33
|
309
|
|
|
|
|
$10.25
|
|
|
|
|
34
|
312
|
|
|
|
|
$10.50
|
|
|
|
|
35
|
314
|
|
|
|
|
$10.75
|
|
|
|
b. As a result of the new price the new competitive wage rate is_________ and workers will be employed
c. Draw two side-by-side graphs representing the derived demand for this firm's labor demand