Labor and Wages-Part 1
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The following chart provides information on |
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a firm that hires labor competitively and sells |
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its product in a competitive market. |
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Units of Labor |
Total Output |
Product Price |
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1 |
14 |
$5 |
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2 |
26 |
$5 |
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3 |
37 |
$5 |
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4 |
46 |
$5 |
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5 |
53 |
$5 |
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6 |
58 |
$5 |
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a.How many units of labor would be employed if the market wage rate were $40? Why?
b.What would happen to employment if the wage rate rose to $50? Explain your answer.
Trade Restrictions – Tariffs-Part 2
Directions: Answer the questions below based on the graph.
1.How many units will the domestic firms produce without trade?
2.How many units will the domestic firms produce without a tariff if the foreign producer can sell the product at a $4 price?
3.How many units will the foreign firms produce / sell if a government tariff of $2.00 is imposed on foreign goods?
4.What will be the total government revenues if a tariff of $2.00 is imposed on foreign goods?
5.What will be the total deadweight losses if a tariff of $2.00 is imposed on foreign goods?
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