平狄克微觀經(jīng)濟(jì)學(xué)第六版第十四章課后答案

1、CHAPTER 14MARKETS FOR FACTOR INPUTS The following two chapters examine the markets for labor and capital. Although the discussion in this chapter is general, most of the examples refer to labor as the only variable input to production, wi th the exception of Example 14.1, which discusses “The Demand

2、 for Jet Fuel” by airlines. Labor demand and supply are discussed in the first section, and the competitive factor market equilibrium and economic rent are discussed in the second section. Section 14.3 explores the factor market structure for the case where the buyer has monopsony power, and section

3、 14.4 explores the case of monopoly power on the part of the seller of the factor.An understanding of this chapter relies on concepts from Chapters 4 through 8 and 10. If you have just covered Chapters 11-13, you might begin by reviewing marginal product, marginal revenue, and cost minimization. You

4、 should then discuss marginal revenue product and the profit-maximizing = w. Explain why we are only interested in the portion of the MP curve below the condition MRPLaverage product curve (the downward-sloping portion. The derivation of the firms demand curve for labor is straightforward when labor

5、 is the only factor, but becomes more complicated when there arecurve shifts as the firm several variable inputs. In particular, you might explain why the MRPLsubstitutes one input for another in production in response to a price change by noting that the MRP L curve is drawn for a fixed level of th

6、e other variable input.When presenting the market labor demand curve, explain that since the input prices change as more inputs are demanded, the market demand curve is not simply the summation of individual demand curves. You can extend the presentation of price elasticity of input demand (see Exam

7、ple 14.1 by discussing the conditions leading to price sensitivity. Elasticity is greater (1 when the elasticity of demand for the product is higher, (2 when it is easy to substitute one input for another, and (3 when the elasticity of supply is higher for other inputs. Elasticity of supply, which w

8、as discussed in Chapter 2, is reintroduced in Example 14.2. You should also distinguish between short-run and long-run elasticity (see Figure 14.6.If you have already covered substitution and income effects, the students will be ready for the derivation of the backward-bending supply curve for labor

9、. Although Figure 14.9 is a straightforward application of these tools, students are often confused by the plotting of income against leisure. Point out that this is just another type of utility maximization problem where the two goods are leisure and income. Income can be thought of as the consumpt

10、ion of goods other than leisure, in that more income buys more goods. You can also implicitly assume that the price of other goods is $1 and the price of leisure is the wage. The supply of labor curve is derived by changing the wage and finding the new level of hours worked. An individuals supply cu

11、rve of labor is back ward bending only when the income effect dominates the substitution effect and leisure is a normal good. Show typical supply curves for each group in Table 14.2. For an experimental study of the labor-leisure trade-off see Battalio, Green, and Kagel, “In come-Leisure Tradeoff of

12、 Animal Workers,” American Economic Review (September 1981.Section 14.2 brings together labor demand and supply for both competitive and monopolistic product markets. Although economic rent was presented in Chapter 8, it is reintroduced with more detail here. In Section 14.3, carefully explain why t

13、he marginal expenditure curve is above the average expenditure curve for a monopsonist (see Figure 14.14. You can discuss how a monopsonist would price discriminate, e.g., pay a different wage rate to each employee. With perfect price discrimination, the marginal revenue expenditure curve would coin

14、cide with the average expenditure curve. Although monopsony exists in some markets, the exercise of monopsony power is rare because of factor mobility. However, the employment of athletes by the owners of professional teams provides a good example (see Example 14.4 “Monopsony Power in the Market for

15、 Baseball Players”. On this same topic, see Sommers and Quinton, “Pay and Performance in Major League Baseball: The Case of the First Family of Free Agents,” Journal of Human Resources (Summer 1982. Section 14.4 discusses the case of unions to explore monopoly power on the part of the seller of the

16、input. 1. Why is a firms demand for labor curve more inelastic when the firm has monopoly power in the output market than when the firm is producing competitively?The firms demand curve for labor is determined by the incremental revenue fromhiring an additional unit of labor known as the marginal re

17、venue product of labor:MRPL = (MPL(MR, the additional output (“product” that the last worker produced,times the additional revenue earned by selling that output. In a competitive industry,the marginal revenue curve is perfectly elastic and equal to price. For a monopolist,marginal revenue is downwar

18、d sloping. As more labor is hired and more output isproduced, the monopolist will charge a lower price and marginal revenue will diminish.All else the same, marginal revenue product will be smaller for the monopolist. Thisimplies that the marginal revenue product for the monopolist is more inelastic

19、 than forthe competitive firm.2. Why might a labor supply curve be backward bending?A backward-bending supply curve for labor may occur when the income effect of anincrease in the wage rate dominates the substitution effect. Labor supply decisions aremade by individuals choosing the most satisfying

20、combination of work and other(leisure activities. With a larger income, the individual can afford to work fewerhours: the income effect. As the wage rate increases, the value of leisure time (theopportunity cost of leisure increases, thus inducing the individual to work longer hours:the substitution

21、 effect. Because the two effects work in opposite directions, the shapeof an individuals labor supply curve depends on the individuals preferences for income,consumption, and leisure.3. How is a computer companys demand for computer programmers a derived demand?A computer c ompanys demand for inputs

22、, including programmers, depends on howmany computers it sells. The firms demand for programming labor depends on (isderived from the demand it faces in its market for computers. As demand forcomputers shifts, the demand for programmers shifts.4. Compare the hiring choices of a monopsonistic and a c

23、ompetitive employer of workers. Which will hire more workers, and which will pay the higher wages? Explain.Since the decision to hire another worker means the monopsonist must pay a higherwage for all workers, and not just the last worker hired, its marginal expenditure curvelies above the input sup

24、ply curve (the average expenditure curve. The monopsonistsprofit-maximizing input demand, where the marginal expenditure curve intersects themarginal revenue product curve, will be less than the competitors profit-maximizinginput choice, where the average expenditure curve intersects the demand curv

25、e. Themonopsonist hires less labor, and the wage paid will be less than in a competitivemarket.5. Rock musicians sometimes earn over $1 million per year. Can you explain such large incomes in terms of economic rent?Economic rent is the difference between the actual payment to the factor of productio

26、nand the minimum amount that the factor is willing to accept. In this case, you mightassume that there are a limited number of top-quality rock musicians who will continueto play rock music no matter what they are paid. This results in a perfectly inelasticsupply curve, or something close to it. Giv

27、en the high demand for rock music, thewage will be very high and there will be a lot of economic rent. If there was a largersupply of top-quality rock musicians, or a more elastic supply, then the economic rentwould be smaller.6. What happens to the demand for one input when the use of a complementa

28、ry input increases?If the demand for the complementary input increases, the demand for the given inputwill increase as well. When demand for the complementary input increases, there isan increase in the quantity hired and possibly the price paid. Both of these changeswill increase the MRP of the giv

29、en input, and hence will increase the quantity hiredand possibly the price paid. Whether the prices of the inputs increases depends on thedegree of monopsony power on the part of the firm.7. For a monopsonist, what is the relationship between the supply of an input and the marginal expenditure on it

30、?The decision to increase employment means the monopsonist must pay all units thehigher price, and not just the last unit hired. Therefore, its marginal expenditurecurve lies above the input supply curve (the average expenditure curve. Hiring morelabor will increase the marginal expenditure, which w

31、ill increase the averageexpenditure. If the average expenditure is increasing, then the marginal expendituremust be greater than the average expenditure.8. Currently the National Football League has a system for drafting college players by which each player is picked by only one team. The player mus

32、t sign with that team or not play in the league. What would happen to the wages of newly drafted and more experienced football players if the draft system were repealed, and all teams could compete for college players?The National Football League draft and reserve clause (a primary issue in the 1987

33、-1988 seasons strike creates a monopsonist cartel among the owners of NFL teams. Ifthe draft system were repealed, competition among teams would increase wages offootball players to the point where the marginal revenue product of each player wouldbe equal to the players wage.9. The government wants

34、to encourage individuals on welfare to become employed. It is considering two possible incentive programs for firms.A. Give the firm $2 per hour for every individual on welfare who is hired.B. Give each firm that hires one or more welfare workers a payment of $1000 peryear, irrespective of the numbe

35、r of hires.To what extent is each of these programs likely to be effective at increasing the employment opportunities for welfare workers?Firms will hire additional labor as long as the extra benefit is greater than the extracost of hiring the worker, or until MRP L = w. Option A would be effective

36、because ifthe firm receives $2 per hour for every welfare worker hired then the effective wagepaid, w, will fall and the firm will find it optimal to hire more labor until the benefits(MRP L again equal the costs (w at the margin. Option B would be effective atincreasing employment opportunities als

37、o in that if the firm hires an individual whohas been on welfare they will then receive $1000. However, plan B is notnecessarily as effective as plan A given the firm only receives one lump sum paymentregardless of the number of welfare workers hired. In this case the firm only has anincentive to hi

38、re the one welfare worker, though they may of course choose to hiremore than one welfare worker.10. A small specialty cookie company, whose only variable input is labor, finds that the average worker can produce 50 cookies per day, the cost of the average worker is $64 per day, and the price of a co

39、okie is $1. Is the cookie company maximizing its profit? Explain.The marginal product of labor is 50 (cookies per day and the price per cookie is 1($ per cookie so the marginal revenue product is $50/day. Since this is less than thewage of $64 per day the cookie company is not maximizing profit. The

40、y areemploying too much labor since the cost of labor is greater than the benefit of labor atthe margin, and are therefore producing too many cookies.11. A firm uses both labor and machines in production. Explain why an increase in the average wage rate causes both a movement along the labor demand

41、curve and a shift of the curve.An increase in the wage rate causes an upward movement along the labor demandcurve. For any given marginal revenue product curve, the firm will find that theywant to hire fewer workers when the wage increases (an upward movement.However, when the wage increases the mar

42、ginal cost will increase which will reducedesired output. When output falls, the firm will not need as many machines and themarginal product of labor curve will shift to the left, assuming machines and laborare complementary. This will also reduce the demand for labor. 1. Suppose that the wage rate

43、is $16 per hour, and the price of the product is $2. Values for output and labor are in units per hour.q L0 020 135 247 357 465 570 6a.Find the profit-maximizing quantity of labor.From the information given above, calculate the marginal product of labor, the extraoutput produced by hiring one more u

44、nit of labor, and then multiply by price to getthe marginal revenue product of labor. To find the profit-maximizing quantity oflabor, use the rule that the firm wants to hire labor only as long as the marginalrevenue product of labor is greater than the nominal wage, or up to the point wherethe marg

45、inal revenue product of labor is equal to the nominal wage. From thetable below, the firm will hire 5 units of labor. b.Suppose that the price of the product remains at $2 but that the wage rateincreases to $21. Find the new profit-maximizing quantity of labor.The above table does not change for thi

46、s part of the problem. However, the firm nolonger wants to hire 5 units of labor because the benefit of the 5th unit ($16 per houris less than the cost of the 5th unit ($21 per hour. The firm would only hire 3 unitsof labor per hour since in this case the benefit still exceeds the cost at the margin

47、.The firm would stick with 3 units instead of 4 unless fractional units are possible.At L=4 the cost is greater than the benefit so you lose profit by hiring the 4th unit oflabor.c.Suppose the price of the product increases to $3 and the wage remains at $16 perhour. Find the new profit-maximizing qu

48、antity of labor.A change in the price of the product will not change the marginal product of labor,but it will change the marginal revenue product of labor. The new marginal revenueproduct of labor is given in the table below. The firm will still want to hire 5 units oflabor, as in part a above. It

49、will not hire the 6th unit because the extra benefit is lessthan the extra cost. Profit will be greater than in part a. d.Suppose that the price of the product remains at $2 and the wage remains at $16,but there is a technological breakthrough that increases output by 25% for any given level of labo

50、r. Find the new profit-maximizing quantity of labor.The technological breakthrough changes the number of units of output produced by agiven number of units of labor, and hence changes the marginal product and themarginal revenue product of labor. The new output values are found by multiplyingthe old

51、 values by 1.25. This new information is given in the table below. The firmwill still choose to hire 5 units of labor. Profit will be greater than in part a. 2. Assume that workers whose incomes are less than $10,000 currently pay no federal income taxes. Suppose a new government program guarantees

52、each worker $5,000, whether or not he or she earns any income. For all earned income up to $10,000, the worker must pay a 50-percent tax. Draw the budget line facing the workers under this new program. How is the program likely to affect the labor supply curve of workers?The budget line for workers

53、under this program is a straight line at $5,000. This lineis shown in the figure and table below. Workers earn $5,000 whether they work or not. 6,000 3,000 2,000 5,0007,000 3,500 1,500 5,0008,000 4,000 1,000 5,0009,000 4,500 500 5,00010,000 5,000 0 5,0003. Using your knowledge of marginal revenue pr

54、oduct, explain the following:a. A famous tennis star is paid $100,000 for appearing in a 30-second televisioncommercial. The actor who plays his doubles partner is paid $500., is equal to marginal revenue from an Marginal revenue product of labor, MRPLincremental unit of output multiplied by the mar

55、ginal product from an incrementalunit of labor, or in other words, the extra revenue generated by having the tennis starappear in the ad. The famous tennis star is able to help increase revenues far morethan the actor, so he is paid much more than the actor. The wage of the actor isdetermined by the

56、 supply and demand of actors willing to play tennis with tennis stars.b. The president of an ailing savings and loan is paid not to stay in his job for the lasttwo years of his contract.The marginal revenue product of the president of the ailing savings and loan is likely tobe negative and therefore

57、, the savings and loan is better off by paying the president notto show up. They have calculated that they will lose less (or gain more by paying thepresident off and hiring someone else.c. A jumbo jet carrying 400 passengers is priced higher than a 250-passenger modeleven though both aircraft cost

58、the same to manufacture.The ability of the larger jet to generate more revenue increases its value to the airline,and therefore the airline is willing to pay more for it.4. The demands for the factors of production listed below have increased. What can you conclude about changes in the demand for the related consumer goods? If demands for the consumer goods remain unchanged, what other explanation is there for an increase in derived demands for these items?a. Computer memory chipsIn general, an increa