with an assignment in Labour economics Part I

with an assignment in Labour economics Part I: Answer the following questions (25%) 1. (10%) The company W that produces chocolate chips has the following production fianction: Number of Production
workers (in kg)
12 1000
14 1025
16 1045
18 1057
20 1066
22 1070 Each kg of chocolate chips costs 5. Assume the company wants to maximize profits. a) Calculate the marginal cost of labor and marginal revenue product for each
level of production. The company can hire as many workers as it wants for 30. b) Draw the demand and supply curve for labor in this company. c) How many people will the company hire? [Part II: Answer 3 of the following 4 questions. Each is worth 25% of the
grade (75%). If you answer all 4 questions, only the first 3 questions answered will be graded. 1. (25%) The unemployment rate is currently used as a major indicator of the
economic health of nations. Is the unemployment rate a good measure of the situation in the labor market? do we need to keep in mind when interpreting
that indicator? 2. (25%) You are hired by the Ministry of Finance to advice the Minister on income
tax issues. You know that increasing income tax rates is equivalent to reducing the
wage rate. The Minister tells you that he believes that if he reduces the income tax rate, everyone will work more and there will be a net increase in tax revenue.
is your response as a responsible labor economist? Explain. 3. (25%) Discuss minimum wages. Show minimum wages on a graph and discuss the
advantages and disadvantages of imposing minimum wages. is the purpose
of minimum wages? How do unions view minimum wages? is the effectiveness of minimum wages? 4. (25%) Define elasticity of demand for labor, both own-wage elasticity of demand
for labor and cross-wage elasticity of demand for labor. Discuss the significance of
elasticity and whether, and if so, it is possible to affect the elasticity of demand for labor