Option 4
Explanation: A represents the wage rate before any migration took place. The foreign wage rate increases after migration and it is denoted by point B. Home wage rate falls after migration and it is represented by C.
Points A, B, and represent and respectively. MPL Marginal product of labor MPL MPL MPL O Home Foreign 0 employment...
MPL Marginal product of labor MPL. MPL o Home L? L' Foreign 0 employment employment Migration of labor from Home to Foreign Total world labor force , and 36) Refer to the graph above. Points A, B, and C represent respectively. A) the global wage rate before migration; the wage rate in foreign after migration; the wage rate in home after migration B) the global wage rate before migration; the wage rate in home after migration; the wage rate in...
7. Assume that Home and Foreign produce two goods, TVs and cars, and use the information below to answer the following questions: In the No-Trade Equilibrium Home Foreign Wagerv = 12 Wagec = ? Wageiv=? Wagec = 6 MPLT=4 MPL = ? MPLiv=? MPL = 1 Prv=? Pc=4 Piv=8 P = ? a. What is the marginal product of labor for TVs and cars in Home? What is the no- trade relative price of TVs in Home? b. What is...
Home Foreign Marginal Products Cheese 6 2 Wine 4 3 Labor Force 100 200 1.Suppose the relative price of wine increases from 1 to 1.25. Draw the home country’s new consumption possibilities frontier. 2. Suppose foreign’s marginal product of labor in producing wine decreases from 3 to 1 due to a disease that is affecting foreign grapes. Sketch the effect that this will have on the world supply curve for wine. Label your axes and provide numerical values. 3.Sketch...
Suppose the marginal product of labor in the economy is given by MPN 0.002 (16, 000- N) 3. (20 points) while the supply of labor is SN 1000+ 1000w. a. Find the market-clearing real wage rate and level of employment b. What happens to the wage rate and employment if wealth rises, reducing the supply of labor to SN =500+ 1000w? c. What happens to the wage rate and employment if after wealth has risen as in part (b), there...
Marginal Products Home Foreign Cheese 6 2 Wine 4 3 Labor Force 100 200 k. What effect will the increase in the relative price from 1 to 1.25 have on the foreign country’s utility (increase, decrease or no change)? Explain l. Suppose foreign’s marginal product of labor in producing wine decreases from 3 to 1 due to a disease that is affecting foreign grapes. Sketch the effect that this will have on the world supply curve for wine. Label your...
Labor Force Home Foreign Marginal Product of Labor Shirts Apples MPLs = 2 MPLA = 5 MPLs* = 1 MPLA* = 2 L =100 L* = 240 For Questions 9-11 below, assume that the Home and Foreign countries are engaged in free trade. 9. The Foreign country exports apples under free trade. True, Free trade price = .45 and OC is lower for apples 10. The Foreign country's terms-of-trade must be above 2 under free trade. 11. If we know...
In Home and Foreign, there are two factors each of production, land and labor, used to produce only one good. The land supply in each country and the technology of production are exactly the same. The marginal product of labor in each country depends on employment as follows: Number of Workers Employed Marginal Product of Last Worker 1 20 2 19 3 18 4 17 5 16 6 15 7 14 8 13 9 12 10 11 11 10 Initially,...
Complete the following labor supply table for a firm hiring labor competitively 9 Marginal Marginal Resource Units of Total Labor Revenue Labor (Labor) Cost Wage Rate Cost Product $14 $ na na 1 14 $38 2 14 28 14 24 4 14 20 5 14 14 6 14 1e Show graphically the labor supply and marginal resource (labor) cost curves for this Instructions: 1. Use the line tool (MRC, plot 6 points) to draw the marginal resource cost curve. 2...
The table below shows the marginal product of labor at various employment levels. Assume this firm is a monopoly, and the marginal revenue is in the table below. Labor Marginal Product of Labor Marginal Revenue 1 10 20 2 8 14 3 7 10 4 5 8 5 3 4 6 1 2 What is the marginal revenue product of labor at each level of labor? If the firm operates in a perfectly competitive labor market where the going...
In positive economic models of the labor market, it is assumed that workers maximize utility (happiness). firms maximize profits. resources are scarce. all of these are true. 2 points QUESTION 13 Because of the principle of __________, marginal product of labor decreases as labor increases. economies of scale. diseconomies of scale. diminishing returns. constant returns to scale. 2 points QUESTION 14 The unemployment rate is computed as the number of employed divided labor force. the number of unemployed...