Econowaugh AP

Monday, February 1, 2021

2009 AP Micro FRQ#3 (World Price, Tariffs)

2009 AP Micro FRQ#3 (World Price, Tariffs)

watch me answer it here

https://youtu.be/POk4t7enQZ8

Wednesday, December 2, 2020

2007 AP Micro FRQ#2 (Labor)

Watch me answer it here

https://youtu.be/rhd7LWTGNiw

a) draw a CLG of the firm's supply curve for unskilled labor.

Remember, a firm in a perfectly competitive market, that can hire all it wants at the wage rate of $90 a day per worker has a horizontal labor supply curve.

b) What is Hzrad's profit maximizing output level? Explain.

c) Hzrad is the first company to use the new technology that increases the productivity of its unskilled workers.

i) How will the new technology effect the quantity of workers hired?

ii) How will the new technology effect the wages paid to Hzrad's workers?

Notice, with the increase productivity (MP of labor has increased) and the firms demand for labor shifts right (increases) more labor is desired. Because the Perfectly Competitive firm's productivity happens to it first the market is unaffected and therefore

the wage rate is unchanged.

Tuesday, November 17, 2020

2005 AP Micro FRQ #3 (Factor Markets/Labor)

Watch me answer it here

https://youtu.be/7D5FZAgdRgk

a) In what kind of market structure does this firm sell its output? Look at the directions above,,, "The firm can sell all the shirts it can produce to retailers at the price of $20 dollars. Read it again,"The firm can sell all the shirts it can produce to retailers at the price of $20 dollars. Read it again,"The firm can sell all the shirts it can produce to retailers at the price of $20 dollars. Question - can a monopoly sell all the goods it wants at the same price,,, NO., it must lower its price to sell more.. Only a perfectly competitive (price taker) industry market could do this....
(Answer: Perfectly Competitive Market)

b) In what kind of market structure does this firm hire its workers? Again, look at the directions, "P & L can hire all of the workers it wants at a market wage rate of $120 per day per worker. Read it again, "P & L can hire all of the workers it wants at a market wage rate of $120 per day per worker." Read it again, "P & L can hire all of the workers it wants at a market wage rate of $120 per day per worker." (Answer: this is a Perfectly Competitive (price taker) labor market.)

The rest is self explanatory - use a chart!!!