WDW101Y1 Lecture : Week3 part 1

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ambergoldfish69

18 Apr 2012

School

UTSG

Department

Woodsworth College Courses

Course

WDW101Y1

Professor

Rafael Gomez

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Document Summary

Firms are not in the business of hiring u. Why they hire u is for what u can do, and the elasticity of demand for the products. When products are inelastic, the demand for labour in those industries, makes the demand more resistant to change. If product is inelastic, than it is better for the workers. Doctors , not much substitute for what they can do. Fortunate if u work in a firm that the labour cost is a smaller part of their total costs. Intrinsically, workers aren"t the things that firms want, any chance a firm has to replace workers with technology, the bargaining room for workers decreases. All this bargaining is based on the economic factors, which undermine whether or not u can get a raise, and stuff. Before keynes people didn"t talk much about macroeconomics, because everyone just assumed the world was a aggregation of the individual effects of the study.

Related Questions

1. The addition to the revenue obtained from firing an additional unit of labour is:

a. marginal revenue product

b. marginal physical product of labour

c.total product

d. marginal factor cost

2. The firm's demand curve for labour is:

a. the demand curve for the good produced divided by the price of the good

b.the marginal revenue product curve for labour

c.the marginal physical product curve for labour divided by the good

d. the marginal physical product curve for labour multiplied by the price of labour

3. If the price of the product is $1.50 and the marginal factor cost of an additional unit of input is $105, how many units of labour should be hired?

Labor input (workers/day)_______________________________-total physical product (output/day)

10 __________________________________________________500

11__________________________________________________600

12__________________________________________________690

13___________________________________________________760

14___________________________________________________800

a. 14

b.12

c.13

d.11

4. the price elasticity of demand for labour equals

a. the change in quantity demanded of labour divided by the change in the price of labour

b. the slope of the demand curve for labour

c. the percentage change in the price of labour divided by the percentage change in the supply of labour

d. the per cent change in the quantity demanded of labour divided by the percentage change in the price of labour

5. We would expect that a rise in labour supply will have a proportionately larger effect on the market wage rate when:

a. the supply for labour is elastic

b.the demand for labour is unitary elastic

c.the demand for labour is elastic

d.the demand for labour is inelastic

orangerhinoceros668

1) The fewer the number substitutes there are for a product.

(a) the less the price elastic the demand for the product is.

(b) the more price elastic the demand for the product is.

(d) the smaller the income elasticity for the product.

2) When people have more time to respond to price changes, demand becomes

(a) more elastic

(b) less elastic

(d) neither more nor less elastic because time has no effect on demand.

3) If the owner of an ice cream store charges a $ 1.20 for an ice cream cone his total revenue is $540 a day. If he lowers the price to $ 1.00 his total revenue is $ 500 a day. The demand for the ice cream is

(a) elastic

(b) inelastic

(d) neither more nor less elastic because time has no effect on demand.

4. The Bill Branch Tool Company wants to increase the quantity of tools it sells by 10%. If the price elasticity of demand is -2.5 the company must

(a) decrease price by 4.0%

(b) increase price by 4.0%

(d) increase price by .025%

1. Suppose that a 10% increase in the wage results in a 5% reduction in employment. In this case, labor demand is said to be:

A. elastic

B. inelastic

C. unit elastic

2. Which of the following best explains why elasticity varies along a linear demand curve?

A. As the quantity of labor demanded rises, the percentage change in quantity demanded declines (for a given change in labor use) while the percentage change in wage increases.

B. As the quantity of labor demanded rises, the percentage change in quantity demanded rises (for a given change in labor use) as does the percentage change in the wage.

C. As the quantity of labor demanded rises, the percentage change in quantity demanded declines (for a given change in labor use) as does the percentage change in the wage.

D. As the quantity of labor demanded rises, the percentage change in quantity demanded declines (for a given change in labor use) while the percentage change in wage decreases

3. Labor demand is more elastic when:

A. the substitution effect resulting from a wage change is larger

B. the scale effect resulting from a wage change is larger

C. both are correct

D. none of the above

4. The scale effect associated with a change in the wage is larger when:

A. the demand for the final product is more elastic

B. labor costs are a smaller share of total costs

C. there are many close substitutes for this category of labor

D. economics of scale are present in the production of the good

5. The price elasticity of demand for the final products affects the own-wage elasticity of demand for labor by affecting the magnitude of:

A. the substitution effect that occurs in the labor market

B. the scale effect that occurs in the labor market

C. both substitution and scale effects

D. neither substitution nor scale effects

6. Unions are expected to attempt to:

A. make it more difficult to replace labor with other resources

B. reduce the elasticity of demand for the final product

C. support laws that reduce the elasticity of supply of other resources

D. all of the above.

E. none of the above

7. Unions are likely to be less successful in negotiating higher wages in those labor markets in which:

A. the demand for the final product is more elastic

B. there are few close substitutes for union workers

C. the price elasticity of supply for other factors of production is relatively high

D. labor costs comprise a small share of total costs

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WDW101Y1 Lecture : Week3 part 1

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