Consider the model of labor pooling, with each firm locating either in an isolated site or...
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Consider the model of labor pooling, with each firm locating either in an isolated site or in a cluster with other fi rms. Suppose that good times (high demand) and bad times (low demand) are equally likely. The table shows wages and workforces in different times and locations. Good times (high demand) Bad times (low demand) Wage $40 $20 Isolated Workforce 50 50 A. Use a figure like Figure 3-3 to illustrate the situation. Wage $30 $30 Cluster Workforce 60 40 B. During good times, the benefit of being in the cluster as opposed to being isolated is, computed as.... C. During bad times, the cost of being in the cluster as opposed to being isolated is, computed as.... FIGURE 3-3 Clustering to Share a Labor Pool A: Isolated Site 24 16 12 Supply High demand *Low demand 12 Number of workers In an isolated site, the firm faces a perfectly inelastic supply of labor (12 workers). The firm hires the same number of workers during high demand and low demand but pays a higher wage during high demand. 24 12 10 B: Cluster with Many Firms Low demand d Supply High demand 21 Number of workers In a cluster, the firm faces a perfectly elastic supply of labor, and the wage is fixed at $10. The firm hires 21 workers during high demand but only three workers during low demand. Consider the model of labor pooling, with each firm locating either in an isolated site or in a cluster with other fi rms. Suppose that good times (high demand) and bad times (low demand) are equally likely. The table shows wages and workforces in different times and locations. Good times (high demand) Bad times (low demand) Wage $40 $20 Isolated Workforce 50 50 A. Use a figure like Figure 3-3 to illustrate the situation. Wage $30 $30 Cluster Workforce 60 40 B. During good times, the benefit of being in the cluster as opposed to being isolated is, computed as.... C. During bad times, the cost of being in the cluster as opposed to being isolated is, computed as.... FIGURE 3-3 Clustering to Share a Labor Pool A: Isolated Site 24 16 12 Supply High demand *Low demand 12 Number of workers In an isolated site, the firm faces a perfectly inelastic supply of labor (12 workers). The firm hires the same number of workers during high demand and low demand but pays a higher wage during high demand. 24 12 10 B: Cluster with Many Firms Low demand d Supply High demand 21 Number of workers In a cluster, the firm faces a perfectly elastic supply of labor, and the wage is fixed at $10. The firm hires 21 workers during high demand but only three workers during low demand.
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Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
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