DeVry University, Chicago

ECON ECON312

Chapter 15

1)What is the difference between nominal and real wages?

2.  “The higher real wages earned by American workers primarily reflect the fact that Americans have a greater inherent ability to produce goods and services than do foreign workers.” Evaluate.

3.  A firm’s labor input, total output of labor, and product price schedules are given below. If labor is the only variable input, how much labor should the firm employ if the wage rate is $8 per day?

Units     Total outputPrice of labor per day of good

2      10 $10

3      14   9

4      19   8

5      23   7

6      27   6

7      31   5

4. What factors might increase the demand for carpenters in a medium-sized town? Be specific.

5. What are the economic effects of imposition of a new occupational license or examination on a labor market?

6.  What is the difference between an exclusive union and an inclusive union? What are the economic effects of each type?

7. What is the case against and the case for the minimum wage? What does the evidence indicate?

8. Use the graph below to illustrate and explain

what would happen in the labor market if a minimum wage was established at a level above the equilibrium wage.

9.  Why is there a significant difference in the pay of physicians and construction workers?