Assume Ford Motor company purchases a robot that can do the welding work of ten union workers. If the robot is a perfect substitute for labor what can we be sure is true about the annual cost of using and maintaining one robot?
What will be an ideal response?
The annual cost would have to be less than ten times the annual salary and benefits of one union worker. If it were any more expensive than that it would make more sense to keep the union workers and get rid of the robot.
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The table above gives the supply schedule for a product. Using the midpoint method, find the price elasticity of supply between points A and B, between B and C, between C and D, and between D and E
What will be an ideal response?
Refer to Figure 17-2. Suppose the market price of bracelets falls to $2. What happens to the curve given in the diagram?
A) The curve shifts to the left. B) Nothing, because labor's productivity has not changed. C) There will be a movement along the curve. D) We cannot answer the question without knowing if Becca would want to hire more workers.