Consider a labour market for physical labour where the number of full-time workers (inverse) demand per...

 

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Consider a labour market for physical labour where the number of full-time workers (inverse) demand per month by a firm is: w = 50-LD where w is the hourly wage rate and LD is the number of full-time workers the firm demands in a month. Use this information to answer the following questions: = (a) (3 marks) ISuppose the going wage rate in the market is w 45, how many workers would be hired? If the price of the good being sold is $5, how much output does the last worker hired produce (at least theoretically)? (b) (4 marks) Suppose the firm is in an area where the overall (inverse) supply of workers willing to work full-time is: w=2+ LS What is the equilibrium wage rate and number of workers hired? What is the benefit to workers (hint: calculate the value of the surplus captured by the work- ers)? Consider a labour market for physical labour where the number of full-time workers (inverse) demand per month by a firm is: w = 50-LD where w is the hourly wage rate and LD is the number of full-time workers the firm demands in a month. Use this information to answer the following questions: = (a) (3 marks) ISuppose the going wage rate in the market is w 45, how many workers would be hired? If the price of the good being sold is $5, how much output does the last worker hired produce (at least theoretically)? (b) (4 marks) Suppose the firm is in an area where the overall (inverse) supply of workers willing to work full-time is: w=2+ LS What is the equilibrium wage rate and number of workers hired? What is the benefit to workers (hint: calculate the value of the surplus captured by the work- ers)?