Assignment:
Labor and Wages
The following chart provides information on a firm that hires labor competitively and sells its product in a competitive market.
|
Units of
Labor
|
Total
Output
|
Product
Price
|
|
1
|
14
|
$5
|
|
2
|
26
|
$5
|
|
3
|
37
|
$5
|
|
4
|
46
|
$5
|
|
5
|
53
|
$5
|
|
6
|
58
|
$5
|
a. How many units of labor would be employed if the market wage rate were $40? Why?
b. What would happen to employment if the wage rate rose to $50? Explain your answer.