Efficient allocation resources between alternative production of good x and good ye
2. Underutilization of fixed input
3 Over Utilization of variable input H
4 The competitive labor and product market
5. Membership representing mainly unskilled workers
from many occupations T
6 Competitive labor market and monopoly in product market-3
7. Monopsonist in labor market and competitive in product market
8. Monopsonist in labor market and Monopolist in product market A
9. Membership representing skilled workers from one occupation. F
10. Employees taking unauthorized work breaks p
Part IV: Short answer questions (2 pts)
A W<MRPL< VMPL
B. WMRPL-VMPL
C. VMPLX VMPLY
D. Shirking behavior
E. Stage 1 of Short run production
F. Craft unions
G. VMPLX> VMPLY
H. Stage III of Short run production 1. General unions
1. W MRPL(but < VMPL)
K. WMRPL(but= VMPL)-
L. Free rider problem
M. Efficiency wage theory
A. W<MRPL<VMPL: This inequality indicates that the wage (W) is lower than the marginal revenue product of labor (MRPL) but higher than the value of marginal product of labor (VMPL). This suggests that the firm is not fully capturing the additional revenue generated by each unit of labor but is still compensating workers more than their individual contribution to production.
B. WMRPL-VMPL: The difference between the wage and the value of marginal product of labor is the economic rent earned by the workers. It represents the reward they receive above and beyond their individual contribution to production.
C. VMPLX>VMPLY: This inequality suggests that the value of marginal product of labor for good X is greater than the value of marginal product of labor for good Y. It implies that labor is more productive or generates more revenue in the production of good X compared to good Y.
D. Shirking behavior: Shirking behavior refers to when workers intentionally reduce their effort or productivity on the job. This can happen due to a lack of motivation, insufficient monitoring, or inadequate compensation. It is a challenge for employers to deter or prevent shirking behavior among their employees.
E. Stage 1 of short-run production: Stage 1 of short-run production is the initial phase where increasing a variable input, such as labor, leads to higher output levels. In this stage, the Marginal Product of Labor (MPL) is increasing, implying that each additional unit of labor contributes more to total output.
F. Craft unions: Craft unions are labor unions that represent workers with a specific skill or trade. They aim to protect and advance the interests of their members, often by negotiating better wages, working conditions, and benefits for their particular craft or trade.
G. VMPLX>VMPLY: This inequality indicates that the value of marginal product of labor for good X is greater than the value of marginal product of labor for good Y. It implies that labor is more productive or generates more revenue in the production of good X compared to good Y.
H. Stage III of short-run production: Stage III of short-run production is the phase where further increases in a variable input, such as labor, lead to decreasing marginal returns and diminishing levels of output. In this stage, the Marginal Product of Labor (MPL) continues to decrease, indicating that each additional unit of labor contributes less to total output compared to the previous stage.
K. WMRPL(but=VMPL)- : This situation suggests that the wage (W) is equal to both the marginal revenue product of labor (MRPL) and the value of marginal product of labor (VMPL). All three values being equal implies that the workers are paid exactly according to their contribution to production.
L. Free rider problem: The free rider problem refers to a situation where some individuals or groups benefit from a public good or a common resource without contributing to its production or cost. This creates a challenge because it is difficult to exclude individuals from enjoying the benefits of the good or resource, even if they don't contribute their fair share. As a result, there can be a lack of incentive for individuals to voluntarily contribute or cooperate, which may lead to under-provision or underutilization of the public good or resource.