Using the resource demand data shown on the left and the resource supply data on the right in answering the following six questions

1. How many workers will this firm choose to employ?

a. 6

b. 5

c. 4

d. 3

e. 2

2. How many units of output will the firm produce:

a. 60

b. 55

c. 48

d. 39

e. 28

3. What will be the equilibrium wage rate?

a. $6

b. $5

c. $4

d. $3

e. $2

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4. What will be the selling price of the products?

a. $1.40

b. $1.60

c. $1.80

d. $2.00

e. $2.20

5. It can be concluded that:

a. both the product and resource markets are imperfectly competitive.

b. the resource market is imperfectly competitive but the product market is purely competitive.

c. both the resource and product market is purely competitive.

d. the resource market is purely competitive but the product market is imperfectly competitive.

6. Now suppose severe inflationary pressures prompt the government to impose a wage ceiling of $2 on this particular type of labor. Other things being unchanged, how many workers will the firm now desire to employ?

a. 6

b. 5

c. 4

d. 3

e. 2

Transcribed Image Text:

Employment 0 1 2 3 4 5 6 Total Product 0 15 28 39 48 55 60 Product Price $2.20 2.00 1.80 1.60 1.40 1.20 1.00 Employment 0 1 2 3 4 5 6 Wage Rate $1.00 2.00 3.00 4.00 5.00 6.00 Employment 0 1 2 3 4 5 6 Total Product 0 15 28 39 48 55 60 Product Price $2.20 2.00 1.80 1.60 1.40 1.20 1.00 Employment 0 1 2 3 4 5 6 Wage Rate $1.00 2.00 3.00 4.00 5.00 6.00

Answer rating: 100% (QA)

TP Price TR PQ Employment Wage TC Profit 0 22 0 0 0 15 2 30 1 1 1 29 2... View the full answer