Defining the Marginal Product of Labor Essay
Order ID:89JHGSJE83839 Style:APA/MLA/Harvard/Chicago Pages:5-10 Instructions:
Defining the Marginal Product of Labor Essay
(50 points total – 5 points for each of 8 parts plus 10 for diagram)
The production technology of a firm is given in the table below.
Table 1: Production Technology of a Firm
Number of workers Units of output MPN 0 0 1 48 2 84 3 108 4 128 5 143 6 155 7 165
Define the marginal product of labor, explain how it relates to the production function (with N on horizontal axis and Y on vertical axis) and find the marginal product of labor (MPN) for each level of employment (fill in the third column of table).
Assume that the price of a unit of output is $10. Calculate the number of workers that will be hired if the nominal wage rate = $190. Calculate the number of workers the firm will hire if the nominal wage is $140. Calculate the number of workers that the firm will hire if the nominal wage is $110.
Draw a production function and real labor demand curve vertically with the PF on top, labeling point A as the wage / price combo of $190 / $10, point B as the $140 / $10 combo, and point C as the $110 / $10 wage / price combo. A correct and completely labeled diagram is worth 10 points
What could cause wages to fall like this (name and support 2 reasons)?
Why exactly does the firm’s behavior change when the nominal wage fall like it did, all else constant? In particular, explain exactly why the firm changes their labor input when nominal wages fall from $190 to $140,all else constant (point A to B). Make sure you refer to the profit maximizing condition when answering this question.
Let’s return back to the initial conditions in the beginning of part b, with prices at $10 and nominal wages at $190 (point A). Now we let prices change and fall from $10 to $9. What could cause such a change (name at least 2 reasons)?
Locate this ‘new’ point (W= $190, P=$9) as point D on your two diagrams. Similar to part d) why exactly does the firm’s behavior change when price fall from $10 to $9, all else constant? Make sure you refer to the profit maximizing condition when answering this question, just as you did in part d. above.
Defining the Marginal Product of Labor Essay
Let’s return to point A, the initial conditions where the nominal wage rate = $190 and the price of a unit of output = $10. Assume that a new technology increases the number of units of output that each worker can produce by 50%. Calculate the number of workers that the firm will hire and the number of units of output that will be produced (fill in the table below).
Defining the Marginal Product of Labor Essay
RUBRIC
Excellent Quality
95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality
0-45%
37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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