平狄克微观经济学第六版第十四章课后答案

C CHHA AP PT TE ER R 1 14 4 MMA AR RK KE ET TS S F FO OR R F FA AC CT TO OR R I INNP PUUT TS S T TE EA AC CHHI INNG G NNO OT TE ES S The following two chapters examine the markets for labor and capital. Although the discussion in this chapter is general, most of the examples refer to labor as the only variable input to production, with the exception of Example 14.1, which discusses “The Demand for Jet Fuel” by airlines. Labor demand and supply are discussed in the first section, and the competitive factor market equilibrium and economic rent are discussed in the second section. Section 14.3 explores the factor market structure for the case where the buyer has monopsony power, and section 14.4 explores the case of monopoly power on the part of the seller of the factor. An understanding of this chapter relies on concepts from Chapters 4 through 8 and 10. If you have just covered Chapters 11-13, you might begin by reviewing marginal product, marginal revenue, and cost minimization. You should then discuss marginal revenue product and the profit-maximizing condition MRPL = w. Explain why we are only interested in the portion of the MP curve below the average product curve (the downward-sloping portion). The derivation of the firms demand curve for labor is straightforward when labor is the only factor, but becomes more complicated when there are several variable inputs. In particular, you might explain why the MRPL curve shifts as the firm substitutes one input for another in production in response to a price change by noting that the MRPL curve is drawn for a fixed level of the other variable input. When presenting the market labor demand curve, explain that since the input prices change as more inputs are demanded, the market demand curve is not simply the summation of individual demand curves. You can extend the presentation of price elasticity of input demand (see Example 14.1) by discussing the conditions leading to price sensitivity. Elasticity is greater (1) when the elasticity of demand for the product is higher, (2) when it is easy to substitute one input for another, and (3) when the elasticity of supply is higher for other inputs. Elasticity of supply, which was discussed in Chapter 2, is reintroduced in Example 14.2. You should also distinguish between short-run and long-run elasticity (see Figure 14.6). If you have already covered substitution and income effects, the students will be ready for the derivation of the backward-bending supply curve for labor. Although Figure 14.9 is a straightforward application of these tools, students are often confused by the plotting of income against leisure. Point out that this is just another type of utility maximization problem where the two goods are leisure and income. Income can be thought of as the consumption of goods other than leisure, in that more income buys more goods. You can also implicitly assume that the price of other goods is $1 and the price of leisure is the wage. The supply of labor curve is derived by changing the wage and finding the new level of hours worked. An individuals supply curve of labor is backward bending only when the income effect dominates the substitution effect and leisure is a normal good. Show typical supply curves for each group in Table 14.2. For an experimental study of the labor-leisure trade-off see Battalio, Green, and Kagel, “Income-Leisure Tradeoff of Animal Workers,” American Economic Review (September 1981). Section 14.2 brings together labor demand and supply for both competitive and monopolistic product markets. Although economic rent was presented in Chapter 8, it is reintroduced with more detail here. In Section 14.3, carefully explain why the marginal expenditure curve is above the average expenditure curve for a monopsonist (see Figure 14.14). You can discuss how a monopsonist would price discriminate, e.g., pay a different wage rate to each employee. With perfect price discrimination, the marginal revenue expenditure curve would coincide with the average expenditure curve. Although monopsony exists in some markets, the exercise of monopsony power is rare because of factor mobility. However, the employment of athletes by the owners of professional teams provides a good example (see Example 14.4 “Monopsony Power in the Market for Baseball Players”). On this same topic, see Sommers and Quinton, “Pay and Performance in Major League Baseball: The Case of the First Family of Free Agents,” Journal of Human Resources (Summer 1982). Section 14.4 discusses the case of unions to explore monopoly power on the part of the seller of the input. R RE EV VI IE EWW Q QUUE ES ST TI IO ONNS S 1 1. . WWh hy y i is s a a f fi ir rmm s s d de emma an nd d f fo or r l la ab bo or r c cu ur rv ve e mmo or re e i in ne el la as st ti ic c w wh he en n t th he e f fi ir rmm h ha as s mmo on no op po ol ly y p po ow we er r i in n t th he e o ou ut tp pu ut t mma ar rk ke et t t th ha an n w wh he en n t th he e f fi ir rmm i is s p pr ro od du uc ci in ng g c co ommp pe et ti it ti iv ve el ly y? ? The firms demand curve for labor is determined by the incremental revenue from hiring an additional unit of labor known as the marginal revenue product of labor: MRPL = (MPL)(MR), the additional output (“product”) that the last worker produced, times the additional revenue earned by selling that output. In a competitive industry, the marginal revenue curve is perfectly elastic and equal to price. For a monopolist, marginal revenue is downward sloping. As more labor is hired and more output is produced, the monopolist will charge a lower price and marginal revenue will diminish. All else the same, marginal revenue product will be smaller for the monopolist. This implies that the marginal revenue product for the monopolist is more inelastic than for the competitive firm. 2 2. . WWh hy y mmi ig gh ht t a a l la ab bo or r s su up pp pl ly y c cu ur rv ve e b be e b ba ac ck kw wa ar rd d b be en nd di in ng g? ? A backward-bending supply curve for labor may occur when the income effect of an increase in the wage rate dominates the substitution effect. Labor supply decisions are made by individuals choosing the most satisfying combination of work and other (leisure) activities. With a larger income, the individual can afford to work fewer hours: the income effect. As the wage rate increases, the value of leisure time (the opportunity cost of leisure) increases, thus inducing the individual to work longer hours: the substitution effect. Because the two effects work in opposite directions, the shape of an individuals labor supply curve depends on the individuals preferences for income, consumption, and leisure. 3 3. . HHo ow w i is s a a c co ommp pu ut te er r c co ommp pa an ny y s s d de emma an nd d f fo or r c co ommp pu ut te er r p pr ro og gr ra ammmme er rs s a a d de er ri iv ve ed d d de emma an nd d? ? A computer companys demand for inputs, including programmers, depends on how many computers it sells. The firms demand for programming labor depends on (is derived from) the demand it faces in its market for computers. As demand for computers shifts, the demand for programmers shifts. 4 4. . C Co ommp pa ar re e t th he e h hi ir ri in ng g c ch ho oi ic ce es s o of f a a mmo on no op ps so on ni is st ti ic c a an nd d a a c co ommp pe et ti it ti iv ve e e emmp pl lo oy ye er r o of f w wo or rk ke er rs s. . WWh hi ic ch h w wi il ll l h hi ir re e mmo or re e w wo or rk ke er rs s, , a an nd d w wh hi ic ch h w wi il ll l p pa ay y t th he e h hi ig gh he er r w wa ag ge es s? ? E Ex xp pl la ai in n. . Since the decision to hire another worker means the monopsonist must pay a higher wage for all workers, and not just the last worker hired, its marginal expenditure curve lies above the input supply curve (the average expenditure curve). The monopsonists profit-maximizing input demand, where the marginal expenditure curve intersects the marginal revenue product curve, will be less than the competitors profit-maximizing input choice, where the average expenditure curve intersects the demand curve. The monopsonist hires less labor, and the wage paid will be less than in a competitive market. 5 5. . R Ro oc ck k mmu us si ic ci ia an ns s s so omme et ti imme es s e ea ar rn n o ov ve er r $ $1 1 mmi il ll li io on n p pe er r y ye ea ar r. . C Ca an n y yo ou u e ex xp pl la ai in n s su uc ch h l la ar rg ge e i in nc co omme es s i in n t te er rmms s o of f e ec co on no ommi ic c r re en nt t? ? Economic rent is the difference between the actual payment to the factor of production and the minimum amount that the factor is willing to accept. In this case, you might assume that there are a limited number of top-quality rock musicians who will continue to play rock music no matter what they are paid. This results in a perfectly inelastic supply curve, or something close to it. Given the high demand for rock music, the wage will be very high and there will be a lot of economic rent. If there was a larger supply of top-quality rock musicians, or a more elastic supply, then the economic rent would be smaller. 6 6. . WWh ha at t h ha ap pp pe en ns s t to o t th he e d de emma an nd d f fo or r o on ne e i in np pu ut t w wh he en n t th he e u us se e o of f a a c co ommp pl le emme en nt ta ar ry y i in np pu ut t i in nc cr re ea as se es s? ? If the demand for the complementary input increases, the demand for the given input will increase as well. When demand for the complementary input increases, there is an increase in the quantity hired and possibly the price paid. Both of these changes will increase the MRP of the given input, and hence will increase the quantity hired and possibly the price paid. Whether the prices of the inputs increases depends on the degree of monopsony power on the part of the firm. 7 7. . F Fo or r a a mmo on no op ps so on ni is st t, , w wh ha at t i is s t th he e r re el la at ti io on ns sh hi ip p b be et tw we ee en n t th he e s su up pp pl ly y o of f a an n i in np pu ut t a an nd d t th he e mma ar rg gi in na al l e ex xp pe en nd di it tu ur re e o on n i it t? ? The decision to increase employment means the monopsonist must pay all units the higher price, and not just the last unit hired. Therefore, its marginal expenditure curve lies above the input supply curve (the average expenditure curve). Hiring more labor will increase the marginal expenditure, which will increase the average expenditure. If the average expenditure is increasing, then the marginal expenditure must be greater than the average expenditure. 8 8. . C Cu ur rr re en nt tl ly y t th he e NNa at ti io on na al l F Fo oo ot tb ba al ll l L Le ea ag gu ue e h ha as s a a s sy ys st te emm f fo or r d dr ra af ft ti in ng g c co ol ll le eg ge e p pl la ay ye er rs s b by y w wh hi ic ch h e ea ac ch h p pl la ay ye er r i is s p pi ic ck ke ed d b by y o on nl ly y o on ne e t te ea amm. . T Th he e p pl la ay ye er r mmu us st t s si ig gn n w wi it th h t th ha at t t te ea amm o or r n no ot t p pl la ay y i in n t th he e l le ea ag gu ue e. . WWh ha at t w wo ou ul ld d h ha ap pp pe en n t to o t th he e w wa ag ge es s o of f n ne ew wl ly y d dr ra af ft te ed d a an nd d mmo or re e e ex xp pe er ri ie en nc ce ed d f fo oo ot tb ba al ll l p pl la ay ye er rs s i if f t th he e d dr ra af ft t s sy ys st te emm w we er re e r re ep pe ea al le ed d, , a an nd d a al ll l t te ea amms s c co ou ul ld d c co ommp pe et te e f fo or r c co ol ll le eg ge e p pl la ay ye er rs s? ? The National Football League draft and reserve clause (a primary issue in the 1987- 1988 seasons strike) creates a monopsonist cartel among the owners of NFL teams. If the draft system were repealed, competition among teams would increase wages of football players to the point where the marginal revenue product of each player would be equal to the players wage. 9.9. TheThe governmentgovernment wantswants toto encourageencourage individualsindividuals onon welfarewelfare toto becomebecome employed.employed. It It is is consideringconsidering twotwo possiblepossible incentiveincentive programsprograms forfor firms.firms. A.A. GiveGive thethe firmfirm $2$2 perper hourhour forfor everyevery individualindividual onon welfarewelfare whowho is is hired.hired. B.B. GiveGive eacheach firmfirm thatthat hireshires oneone oror moremore welfarewelfare workersworkers a a paymentpayment ofof $1000$1000 perper year,year, irrespectiveirrespective ofof thethe numbernumber ofof hires.hires. ToTo whatwhat extentextent is is eacheach ofof thesethese programsprograms likelylikely toto bebe effectiveeffective atat increasingincreasing thethe employmentemployment opportunitiesopportunities forfor welfarewelfare workers?workers? Firms will hire additional labor as long as the extra benefit is greater than the extra cost of hiring the worker, or until MRPL = w. Option A would be effective because if the firm receives $2 per hour for every welfare worker hired then the effective wage paid, w, will fall and the firm will find it optimal to hire more labor until the benefits (MRPL) again equal the costs (w) at the margin. Option B would be effective at increasing employment opportunities also in that if the firm hires an individual who has been on welfare they will then receive $1000. However, plan B is not necessarily as effective as plan A given the firm only receives one lump sum payment regardless of the number of welfare workers hired. In this case the firm only has an incentive to hire the one welfare worker, though they may of course choose to hire more than one welfare worker. 10.10. A A smallsmall specialtyspecialty cookiecookie company,company, whosewhose onlyonly variablevariable inputinput is is labor,labor, findsfinds thatthat thethe averageaverage workerworker cancan produceproduce 5050 cookiescookies perper day,day, thethe costcost ofof thethe averageaverage workerworker is is $64$64 perper day,day, andand thethe priceprice ofof a a cookiecookie is is $1.$1. IsIs thethe cookiecookie companycompany maximizingmaximizing itsits profit?profit? Explain.Explain. The marginal product of labor is 50 (cookies per day) and the price per cookie is 1 ($ per cookie) so the marginal revenue product is $50/day. Since this is less than the wage of $64 per day the cookie company is not maximizing profit. They are employing too much labor since the cost of labor is greater than the benefit of labor at the margin, and are therefore producing too many cookies. 11.11. A A firmfirm usesuses bothboth laborlabor andand machinesmachines inin duction. ExplainExplain whywhy anan increaseincrease inin thethe averageaverage wagewage raterate causescauses bothboth a a movementmovement alongalong thethe laborlabor demanddemand curvecurve andand a a shiftshift ofof thethe curve.curve. An increase in the wage rate causes an upward movement along the labor demand curve. For any given marginal revenue product curve, the firm will find that they want to hire fewer workers when the wage increases (an upward movement). However, when the wage increases the marginal cost will increase which will reduce desired output. When output falls, the firm will not need as many machines and the marginal product of labor curve will shift to the left, assuming machines and labor are complementary. This will also reduce the demand for labor. E EX XE ER RC CI IS SE ES S 1.1. SupposeSuppose thatthat thethe wagewage raterate is is $16$16 perper hour,hour, andand thethe priceprice ofof thethe productproduct is is $2.$2. ValuesValues forfor outputoutput andand laborlabor areare inin unitsunits perper hour.hour. q qL L 0 00 0 20201 1 35352 2 47473 3 57574 4 65655 5 70706 6 a.a.FindFind thethe profit-maximizingprofit-maximizing quantityquantity ofof labor.labor. From the information given above, calculate the marginal product of labor, the extra output produced by hiring one more unit of labor, and then multiply by price to get the marginal revenue product of labor. To find the profit-maximizing quantity of labor, use the rule that the firm wants to hire labor only as long as the marginal revenue product of labor is greater than the nominal wage, or up to the point where the marginal revenue product of labor is equal to the nominal wage. From the table below, the firm will hire 5 units of labor. qLMPLMRPL 00- 2012040 3521530 4731224 5741020 655816 706510 b.b.SupposeSuppose thatthat thethe priceprice ofof thethe productproduct remainsremains atat $2$2 butbut thatthat thethe wagewage raterate increasesincreases toto $21.$21. FindFind thethe newnew profit-maximizingprofit-maximizing quantityquantity ofof labor.labor. The above table does not change for this part of the problem. However, the firm no longer wants to hire 5 units of labor because the benefit of the 5th unit ($16 per hour) is less than the cost of the 5th unit ($21 per hour). The firm would only hire 3 units of labor per hour since in this case the benefit still exceeds the cost at the margin. The firm would stick with 3 units instead of 4 unless fractional units are possible. At L=4 the cost is greater than the benefit so you lose profit by hiring the 4th unit of labor. c. c.SupposeSuppose thethe priceprice ofof thethe productproduct increasesincreases toto $3$3 andand thethe wagewage remainsremains atat $16$16 perper hour.hour. FindFind thethe newnew profit-maximizingprofit-maximizing quantityquantity ofof labor.labor. A change in the price of the product will not change the marginal product of labor, but it will change the marginal revenue product of labor. The new marginal revenue product of labor is given in the table below. The firm will still want to hire 5 units of labor, as in part a above. It will not hire the 6th unit because the extra benefit is less than the extra cost. Profit will be greater tha