360154504721236058082406855150a. If the jeans sell for $35 a pair, and the competitive market wages is $250 per week, how manyworkers should Stone hire? How many pairs of jeans will the company produce each week?Answer: After deducting the $5 cost of the fabric, the company receives $30 from the sale of eachpair of jeans. The marginal product of labor and the value of the marginal product of labor areshown on the table. Since the market wage is $250/wk, it is not worthwhile to hire the fifthworker, whose VMP is only $240/wk. The firm hires 4 workers and produces 72 pairs of jeansper week.b. If the price of jeans rises to $45, how many workers will the company now hire?Answer: The final column of the table now has VMPs of 1000, 800, 600, 480, 320, and 200.Stone will now hire a fifth worker.8. (15 pts) Suppose the demand and supply curves for unskilled labor in the Corvallis labormarket are shown in the figure below. By how much will the imposition of a minimum wage at$12 per hour reduce total economic surplus? Calculate the amounts by which employer surplus
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