Calculate the missing data, graph the Marginal Revenue Product (MRP) curve, and answer the questions. The MRP = marginal revenue product is calculated as MP x Price = MRP.
Daily Demand for Workers in a Perfect Competitive Labor and Product Markets (The workers are price takers). Most workers are in this market, the wage is set by the company and the worker accepts the job or not. There is little or no control over the wage that a worker will get.
|
Workers
|
Marginal Product per worker
|
Price
|
Marginal Revenue Product
|
|
0
|
0
|
$3.00
|
|
|
1
|
20
|
3.00
|
|
|
2
|
19
|
3.00
|
|
|
3
|
18
|
3.00
|
|
|
4
|
17
|
3.00
|
|
|
5
|
16
|
3.00
|
|
|
6
|
15
|
3.00
|
|
|
7
|
14
|
3.00
|
|
|
8
|
13
|
3.00
|
|
1. Which of the two columns in the table above represent the labor demand schedule?
2. What economic law accounts for the decreasing marginal product of labor (MP)?
3 If workers are paid $48.00 per day, how many workers should be hired by the company?
4. How many workers should be hired at $41 per day?
5. If the demand for the product is cut in half, what will happen to the labor demand curve?
6. What kind of workers would be in a Oligopoly case, where there are a few workers which can work in that job and the workers will have control over their wages?
7. What kind of workers would be a Monopoly case, where there Is Only one worker who can do that job alone?
8. Matching the MRP = wage, is that an appropriate way to set wages and hiring? Why?
9. What is economic rent? How is it different than profits that we talk about?
10. What is the proper role of unions? Why are they declining in membership and influence in the economy?