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.

Short Answer

Expert verified

a. Increase in demand for labor.

b. Increase in demand for labor.

Step by step solution

01

Introduction

While creating labour and products, organizations require work and capital as contributions to their creation interaction. The demand for work is a financial matters guideline got from the demand for a company's result. That is, on the off chance that demand for a company's result builds, the firm will demand more work, in this manner employing more staff.

02

Explanation Part (a)

Another schooling program controlled by the organization expands work's minor item When the negligible result of the firm builds, its minimal income item will likewise increment, as MRP=MP * P. At the point when peripheral income result of the work builds, its demand for work will likewise increment.

03

Explanation Part (b)

The firm finishes another plant with an enormous work area and another hardware that specialists can use and that doesn't fill in for the capacities given by laborers' work. The new hardware will require more laborers to proficiently work it. Besides, since the firm presently has a more noteworthy work area for laborers and hardware, the demand for work will increment.

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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.

Explain what labor outsourcing is and how it affects U.S. wages and employment.

A profit-maximizing monopolist hires workers in a perfectly competitive labor market. Employing the last worker increased the firm's total weekly output from 110 units to 111 units and caused the firm's weekly revenues to rise from \(25,000 to \)25,750. What is the current prevailing weekly wage rate in the labor market?

Suppose that we were to observe unemployment in the labor market depicted in Figure 28-4. Would this imply that the current wage rate is above or below the $1,000 equilibrium weekly wage rate in the figure? Explain briefly.

Consider Figure 28-7. Suppose that the monopolist is contemplating hiring 14 units of labor, which it knows would cause the marginal product to decline to 150 units of output per unit of labor. The product price also decreases to \(4.50 per unit, and the firm's marginal revenue declines to \)3.20 per unit. What would be the firm's marginal revenue product if it hires a 14th unit of labor?

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