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Chapter 28: Q. d- For Critical Thinking (page 641)

Other things being equal, how would a firm adjust if the market clearing wage rate for older workers decreases relative to the market clearing wage rate for younger workers? Explain briefly.

Short Answer

Expert verified

Increasing this could lift the number of low workers' income and financial status out of deprivation.

The wage at which supply of labor equals labour demand is known as the market clearing wage.

Step by step solution

01

Introduction.

To calculate employee wages, divide total tips by weeks worked, then divide that total by hours worked to get the tip rate. The tip rate is then added to the hourly rate; the total wages earned must be equal to or greater than the minimum wage.

02

Explanation.

The market clearing wage would be the wage at which labour supply equals labour demand.

Market equilibrium prices and wages are comparable within this sellers and buyers get everything they want.

03

Cause of raising minimum wage affect the economy.

Increasing it would raise most low-wage workers' earnings and family income, lifting some families out of poverty, but it would cause other low-wage workers to lose their jobs and their family income to fall.

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Most popular questions from this chapter

Recently, there has been an increase in the market demand for products of firms in manufacturing industries. The production of many of these products requires the skills of welders. Because welding is a dirty and dangerous job compared with other occupations, in recent years fewer people have sought employment as welders. Draw a diagram of the market for the labor of welders. Use this diagram to explain the likely implications of these recent trends for the market clearing wage earned by welders and the equilibrium quantity of welding services hired.

Based on the information in Problem 28-16, if the firm considered in Figure 28-1 were to employ 14 units of labor, what would be the resulting marginal revenue product of the 14 th unit of labor hired?

The following table depicts the product market and labor market a digital device manufacturer faces.

a. Calculate the firm's marginal product, total revenue, and marginal revenue product at each input level above 10units.

b. The firm competes in a perfectly competitive labor market, and the market wage it faces is $100per worker per day. How many workers will the profit-maximizing employer hire?

Explain how the following events would affect the demand for labor.

a. A new education program administered by the company increases labor's marginal product.

b. The firm completes a new plant with a larger workspace and new machinery that workers can utilize and that does not substitute for the functions provided by workers' labor.

Explain why the short-term effects of outsourcing on U.S. wages and employment tend to be more ambiguous than the long-term effects.
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