Complete the following table: Instructions: Enter your responses for total wages

Question

Complete the following table:

Instructions: Enter your responses for total wages paid to the nearest whole number. Enter your responses for marginal wage rounded to two decimal places. Indicate a negative response with a negative (-) sign.

(a) What is the marginal wage when the nominal wage is $13?

Instructions: Enter your response rounded to two decimal places.

$

(b) At what nominal wage rate does the marginal wage first become negative?

Instructions: Enter your response rounded to the nearest whole number.

$

Wage Rate Quantity of Labor Demanded Total Wages Paid Marginal Wage $14 0 $ 13 5 $ $ 12 20 $ $ 11 50 $ $ 10 75 $ $ 9 95 $ $ 8 110 $ $ 7 120 $ $

Explanation / Answer

Marginal wage =(Difference in total wage paid)/(difference in no. of workers)

a) From the table we can see that marginal wage is $13 when nominal wage is $13

b) From the table marginal wage becomes negative at nominal wage $7

Wage Rate w Quantity of Labor Demanded Q Total Wages Paid = w*Q Marginal Wage $14 0 $0 13 5 65 $13.00 12 20 240 $11.67 11 50 550 $10.33 10 75 750 $8.00 9 95 855 $5.25 8 110 880 $1.67 7 120 840 -$4.00

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