What is the short-run elasticity of this firms labor demand

Reference no: EM131923234

Problem

1. A firm's technology is such that it must combine 5 person-hours of labor with 3 machine-hours to produce one unit of output. The firm has 15 machines in place and the wage rate rises from $10 per hour to $20 per hour. What is the short-run elasticity of this firm's labor demand?

2. Suppose that the supply curve of labor in a competitive industry is given by Es = 10 + w; and the demand curve for labor is given by ED = 40 - 4w. What is the equilibrium wage and employment? What is the unemployment rate? Suppose now that the government sets a minimum wage of $8. How many workers would lose their jobs? How many additional workers would want a job at the minimum wage? What is the unemployment rate?

Reference no: EM131923234

Questions Cloud

Which type of job will offer a higher wage : How is the market compensating wage differential between safe jobs and risky jobs determined? Which type of job will offer a higher wage?

Discuss your understanding of science : Discuss your understanding of science and its processes as compared to the opinion of most (that science is a body of knowledge to be memorized).

Describe how the worker decides whether to accept a safe job : Describe how the worker decides whether to accept a safe job (where she cannot be injured) or a risky job (where she will certainly be injured).

What are the elements that comprise the external environment : The actual elements of the external environment have not been described. What are the elements that comprise the external environment of an organization?

What is the short-run elasticity of this firms labor demand : The firm has 15 machines in place and the wage rate rises from $10 per hour to $20 per hour. What is the short-run elasticity of this firm's labor demand?

Water balloon travel horizontally : If shot at the angle you calculated in part (a), how far will the water balloon travel horizontally?

Why these factors are important in shaping the seo efforts : In considering your classmates' postings, discuss why these factors are important in shaping the SEO efforts.

Calculate the maximum height above the roof reached : Calculate the maximum height above the roof reached by the rock, the magnitude of the velocity of the rock just before it strikes the ground

What will happen to the number of workers hired by the firm : The firm's elasticity of demand for labor is -0.5. The firm sells its output at $20 per unit. What will happen to the number of workers hired by the firm?

User Account

All Pages