Handout 3c - Handout 3c Labor Market in Abbeville, LA...

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Handout 3c – Labor Market in Abbeville, LA Spring 2007 Page 1 of 2 1. Consider the following production technology for crawfish harvesting in Abbeville, LA. In Abbeville and elsewhere in southern Louisana, crawfish are harvested in individually-owned ponds using nets and traps towed by either boats or people. In this example, the capital stock – the number of ponds, boats, nets and traps – is fixed. Labor ( N ) Output ( Y ) Marginal Product of Labor ( MPN ) Number of workers Thousands of crawfish Thousands of crawfish per worker 0 0 -- 1 20 2 38 3 54 4 68 5 80 6 90 7 98 8 104 9 108 10 110 a. Fill in the marginal product of labor ( MPN ) column in the above table. b. Explain briefly why the marginal product of labor ( MPN ) decreases as more workers are employed in crawfish harvesting. c. A profit-maximizing firm will keep hiring labor ( N ) until what condition holds?
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Handout 3c – Labor Market in Abbeville, LA Spring 2007 Page 2 of 2 2. This question has you consider the impact of Hurricane Rita on the Abbeville labor market.
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This note was uploaded on 04/18/2008 for the course ECON 100 taught by Professor Kasilwal during the Spring '07 term at CSU Long Beach.

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Handout 3c - Handout 3c Labor Market in Abbeville, LA...

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