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 $11?

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

Following is the complete table -

Quantity of labor

demanded (Q)

Marginal wage (MW)

(a)

The marginal wage is $10.33, when the nominal wage is $11.

(b)

The marginal wage first become negative when nominal wage is $7.

Wage rate (W)

Quantity of labor

demanded (Q)

Total wages (TW)

Marginal wage (MW)

TW = W*Q MW = (Change in TW/Change in Q) 14 0 - - 13 5 65 (65-0/5-0) = 13 12 20 240 (240-65/20-5) = 11.67 11 50 550 (550-240/50-20) = 10.33 10 75 750 (750-550/75-50) = 8 9 95 855 (855-750/95-75) = 5.25 8 110 880 (880-855/110-95) = 1.67 7 120 840 (840-880/120-110) = -4

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