Paper used for newsprint Given the paper is being used to print newspapers then there must have been an in sen the circulation of newspapers. d Aluminum used for beverage cans With an increase in demand for col drinks in the summer,the seasona demand for aluminum increases,so this is one possible explanation Alternatively,if glass or plastic have become more expensive then this may affect the demand for aluminum.Finally,changes in the market for recycled aluminum may affect the demand for new aluminum. 5.Suppose there are two groups of workers,unionized and nonunionized. Congress passes a law that requires all workers to join the union.What do expect to happen to the wage rates of formerly nonunionized workers? workers who were originally unionized?What have you assumed about the union's behavior? In general,we expect that nonunionized workers are earning bwer wages than unionized workers.If all workers are forced to ioin the union.it would be reasonable to expect that the nonunionized workers will now receive highe r wages ar could either way.There are a couple of items to conside a wage tha First,the union now has more monopoly power in that there are no nonunion workers to act as substitutes for union workers This gives more power to the union which means higher wages can in general be negotiated.How er the union n mor If wage kept at a high there will be fewer jobs.and henceome previously nonunionized workers may end up with no job.The union may wish to trade off some of the wage for a guarantee of more jobs.The average income of all workers will rise if labor demand is inelastic and will fall if labor demand is elastic 6. ction function is given byQ=,forL=0 re L is labo r day and Q is output per day.n draw the firm's demand for labor curve ifthe firm's output sells for $10 ina competitive market.How many workers will the firm hire when the wage rate is $30 per day?$60 per day?(Hint:The marginal product of labor is 12-2L) The demand for labor is given by the marginal revenue product of labor. nue and the mar rginal product of labor mpetiti marginal revenue,so MR= 0 We are given MP=12 -2L (the slope of the production function). c. Paper used for newsprint Given the paper is being used to print newspapers then there must have been an increase in the circulation of newspapers. d. Aluminum used for beverage cans With an increase in demand for cold drinks in the summer, the seasonal demand for aluminum increases, so this is one possible explanation. Alternatively, if glass or plastic have become more expensive then this may affect the demand for aluminum. Finally, changes in the market for recycled aluminum may affect the demand for new aluminum. 5. Suppose there are two groups of workers, unionized and nonunionized. Congress passes a law that requires all workers to join the union. What do you expect to happen to the wage rates of formerly nonunionized workers? of those workers who were originally unionized? What have you assumed about the union’s behavior? In general, we expect that nonunionized workers are earning lower wages than unionized workers. If all workers are forced to join the union, it would be reasonable to expect that the nonunionized workers will now receive higher wages and the unionized workers will receive a wage that could go either way. There are a couple of items to consider. First, the union now has more monopoly power in that there are no nonunion workers to act as substitutes for union workers. This gives more power to the union, which means higher wages can in general be negotiated. However, the union now has more members to satisfy. If wages are kept at a high level, there will be fewer jobs, and hence some previously nonunionized workers may end up with no job. The union may wish to trade off some of the wage for a guarantee of more jobs. The average income of all workers will rise if labor demand is inelastic and will fall if labor demand is elastic. 6. Suppose a firm’s production function is given by Q = 12L - L 2 , for L = 0 to 6, where L is labor input per day and Q is output per day. Derive and draw the firm’s demand for labor curve if the firm’s output sells for $10 in a competitive market. How many workers will the firm hire when the wage rate is $30 per day? $60 per day? (Hint: The marginal product of labor is 12 - 2L.) The demand for labor is given by the marginal revenue product of labor. This is equal to the product of marginal revenue and the marginal product of labor: MRPL = (MR)(MPL). In a competitive market, price is equal to marginal revenue, so MR = 10. We are given MPL = 12 - 2L (the slope of the production function)