Answer:
The diagram is well defined showing all the parameters required.
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Each scenario below gives some information about price elasticity of demand for a firm. Use this information to answer the quest
1 answer:
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Answer:
$17,000 Favorable
Explanation:
Provided information, we have
Standard hours for each unit = 0.8 hours
Standard Rate per hour = $34
Actual quantity produced = 7,650 units
Actual labor hours used = 5,620
Actual rate per hour = $118,020/5,620 = $21 per hour
Standard hours for Actual output = 7,650 0.8 = 6,120 hours
Labor Efficiency Variance = (Standard Hours - Actual Hours) Standard labor rate per hour
= (6,120 - 5,620) $34
= $17,000 Favorable
As the amount is positive and actual hours used is less than standard hours the variance is favorable.
Answer:
Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $12.50.
Wage Labor Demanded Labor Supplied
$12.50 375,000 625,000
This will result in a surplus of labor (625,000 higher than 375,000)
Which of the following statements are true?
- Binding minimum wages cause structural unemployment. As with all price floors, a deadweight loss results, because the quantity supplied is much greater than the quantity demanded. In this case, the price of labor is the wage, and the deadweight loss = structural unemployment
- In the absence of price controls, a surplus puts downward pressure on wages until they fall to the equilibrium. Since a labor surplus exists, the price of labor should start to decrease in order to match the equilibrium price.
- If the minimum wage is set at $12.50, the market will not reach equilibrium. The quantity supplied of labor is much greater than the quantity demanded for labor resulting in a surplus.
