week7 assignment Microecomonic

Microeconomics – Week #7 Assignment

Labor and Wages

  

The following chart provides information on 

 

a firm that hires labor competitively and sells

 

its product in a competitive market.

        

Units of Labor

Total Output

Product Price

 

1

14

$5 

 

2

26

$5 

 

3

37

$5 

 

4

46

$5 

 

5

53

$5 

 

6

58

$5 

a. How many units of labor would be employed if the market wage rate were $40? Why?

b. What would happen to employment if the wage rate rose to $50? Explain your answer.