Question 1: Explain why the quantity of labor supplied increases with the wage, other things remain constant
(Market Supply of Labor)
1. The following table shows the hours per week supplied to a particular market by three individuals at various wage rates. Calculate the total hours per week (QT) supplied to the market.
| |
Hours per Week |
|
Hourly
Wage
|
Q1
|
Q2 |
Q3 |
| $ 15 |
20 |
0 |
0 |
| 16 |
25 |
0 |
0 |
| 17 |
35 |
10 |
0 |
| 18 |
45 |
25 |
10 |
| 19 |
42 |
40 |
30 |
| 20 |
38 |
37 |
45 |
Why does the quantity supplied tend to increase with the hourly wage? Which individuals, if any, have backward-bending supply curves in the wage range shown? Does the market supply curve bend backward in the wage range shown in the table?
2. (Substitution and Income Effects) Suppose that the cost of living increases, thereby reducing the purchasing power of your income. If your money wage doesn't increase, you may work more hours because of this cost-of-living increase. Is this response predomi-nantly an income effect or a substitution effect? Explain.
3. (Nonwage Determinants of Labor Supply) Suppose that two jobs are exactly the same except that one is performed in an air-conditioned workplace. How could you measure the value workers attach to such a job amenity?
2 Describe why some workers earn higher wages than other workers
4. (Why Wages Differ) Why might permanent wage differences occur between different markets for labor or within the same labor market?
3 Summarize the objectives of labor unions and outline strategies used to achieve these objectives
5. (Craft and Industrial Unions) Both industrial unions and craft unions attempt to raise their members' wages, but each goes about it differently. Explain the difference in approaches and describe the impact these differences have on excess quantity of labor supplied.
6. (Union Objectives) What other objectives besides higher wages do unions pursue?
7. (Union Strategies) What strategies do unions employ to achieve their wage objectives?
4 Offer reasons why unionization rates have declined in recent decades
8. (Unionization Rates) What trends have worked against the union movement during the last half century? What has happened to the effectiveness of strikes and why?
9. (industrial Unions) Review the logic underlying the exhibit below. Then determine the effect, on the industry and a typical firm, of an increase in the demand for industry output. Show your conclusions on a graph. Does the magnitude of the increase in demand make a difference?
Effects of Labor Union's Wage Floor
10. (The Strike)Why might firms in industries with high fixed costs be inclined to prevent strikes or end strikes quickly?
11. (Industrial Unions) Why are unions more effective at raising wages in oligopolistic industries than in competitive industries?