Suppose that a mining company employs 80% of the available laborers in a town. Explain what will happen to the number of laborers hired and the wage rate paid by the mine if a minimum wage is set at the competitive level
What will be an ideal response?
The mine was operating as a monopsony. The competitive minimum wage will result in the mine hiring a competitive level of laborers at the higher competitive wage.
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The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre
If the market wage is $300 per day, the firm will NOT hire a fourth worker because the fourth worker would create A) an economic loss and the firm would shut down. B) additional revenue that exceeds the worker's wage. C) additional revenue that exceeds the worker's value of marginal product. D) additional revenue that falls short of the worker's wage.
Typically, countries with high growth rates of per-capita GDP have
a. lower infant mortality rates b. higher life expectancies c. higher adult literacy d. all of the above e. higher unemployment rates.