Purchase Solution

equilibrium wage rate and level of employment

Not what you're looking for?

Ask Custom Question

Assume a firm is a monopsonist that can hire its first worker for $6 but must increase the wage rate by $3 to attract each successive worker. Draw the firm's labor supply and marginal resource cost curves and explain their relationships to one another. On the same graph, plot the labor demand data of question 2 in Chapter 14. What are the equilibrium wage rate and level of employment?

Attachments
Purchase this Solution
Solution Summary

What are the equilibrium wage rate and level of employment is determined.

Solution Preview

Please see the attached file.

Data for of question 2 chapter 14
Units of Marginal
Labor Total Marginal Product Total Revenue
Labor Product Product Price Revenue Product$
0 0 $2
1 17 ------ 2
2 31 ------- 2
3 43 2
4 53 2
5 60 2
6 65 2

6. Assume a firm is a monopsonist that can hire its first worker ...

Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

View More Free Quizzes
Related BrainMass Solutions

  • Finding equilibrium wage and employment level

    Solution describes the steps to find out equilibrium wage and employment level in the given scenario.

  • Mixed Questions - Opportunity Cost of Leisure, Equilibrium Wage Rate etc.

    Equilibrium wage rate and employment level 2. Economic rent 3. Demand for labor The solution discusses the following economic concepts: equilibrium wage rate and employment level, economic rent, and demand for labor in 3 multi-part questions.

  • General Equilibrium in the labour market

    and voluntary and involuntary unemployment ii) assuming that the real wage is flexible, what are the equilibrium wage rate, the level of employment and the unemployment level?

  • Supply and Demand

    a) What will be the free market wage rate and employment level? b)Suppose the government sets a $5.00 per hour minimum wage. What will be the employment level? c) Suppose the government pays a subsidy of $1 per hour directly to the employee.

  • Derivation of IS and LM equations

    Now what are the general equilibrium values of the real wage, employment, output, the real interest rate, consumption, investment, and price level? 5. Consider the following economy: Desired consumption C^d = 1275 + 0.5(Y - T) - 200r.

  • Price Controls and Equilibrium

    The overall effect is that business has to pay wages at higher rates than the equilibrium wages, and the level of employment is at a lower level than the equilibrium level.

  • The industry equilibrium wage/employment combination

    Suppose demand and supply conditions in the competitive market for unskilled labor are as follows: Qd=66.25-5P (demand) Qs=-27.5+10P (supply) where Q is millions of hours of unskilled labor and P is the wage rate

  • Labor Unions and Labor markets


    The intersection of the labor supply and labor demand curves reveals the equilibrium wage
    rate.
    Equilibrium wage rate: the wage rate at which the quantity of labor supplied in a given time period equals the quantity of labor demanded.

  • effect of the union on the non-unionized East region

    What is the equilibrium wage rate and level of employment, and unemployment? b. If the supply of labour increased, what would happen to the equilibrium wage? Explain. c.

View More Related Solutions