Micro Chapter 18 【The Markets for the Factors of Production】

1. Computing labor productivity and its relationship to the demandfor labor
Gopher Excavators produces shovels in a small factory and sells the shovels in a competitive market. The following table shows the company's production function:


2. Graphing demand for labor and computing the optimal quantity
A company operates in a competitive market, selling each unit of output for a price of $30 and paying the market wage of $375 per day for each worker it hires.


3. How changes in the goods market affect the demand for labor
In this question, you'll explore the effect of a good weather season in Vermont on the price of blueberries in the United States, as well as on the daily wages of blueberry pickers in Florida. Assume that blueberry buyers don't care whether their blueberries come from Vermont or Florida.


4. Profit maximization
Consider Live Happley Fields, a small player in the strawberry business whose production has no individual effect on wages and prices. Live Happley's production schedule for strawberries is given in the following table:


5. Labor market definitions
Complete the following table by selecting the term that matches each definition on the left.


6. Plotting the supply of labor


7. Shifts in labor supply
Assume that the information technology and consulting industries employ people with similar skills. Suppose an increase in the demand for consultants leads to a rise in their wages, while the demand for computer analysts remains the same.


8. Links between factor markets
Consider the markets for factors of production, such as labor and capital, to produce furniture in the United States before the invention of electric motors. In the late 19th century, commercially successful electric motors became available and enabled furniture and many other goods to be produced more efficiently.