1. Graph a short-run production function, and the marginal and average products of that function. Label the stages of the function. Make sure your graph and stages show the correct relationships between MP, AP, and the stages.
2. A clothing store is considering implementing a job training program for temporary
workers during the holiday rush, in a perfectly competitive labor market:
MRP
Untrained $100/day
During training $20/day
Trained $150/day
Training lasts for 2 weeks (5 work days/week), and workers would remain employed
for 6 more weeks after training is over.
(a) Suppose that this training involves learning to use the cash register, properly folding clothes, and basic customer service. Who would benet from this training, the workers or the rm? Would that party choose to implement the training program, or not? If it were implemented, what would worker pay be during each period (before, during, and after training)?
(b) Now suppose the training involves learning the specic policies of the company and more about their specic clothing lines. In this case, which party would benet from the training? Would it be implemented? And what would worker pay be during each period?