Question

Joey, Many and Jim have the following labor supply.
Wage Joey Mandy Jim
$5 4 0 2
$10 8 4 6
$15 12 8 9
a. Who values thier leisure most, Joey, Mandy or Jim?
b. What is the total labor supply given a wage of $15?
c. What if the demand for labor were fixed at 18. what would be the equilibrium wage?

Answer 1

Answer:

• a. Mandy
• b. 29 units
• c. $10

Explanation:

a. Mandy enjoys leisure the most

The person who enjoys leisure the most is the one that supplies the least amount of labor. The logic is that if they are not supplying labor then they would be on leisure.

Mandy supplies the least labor so must enjoy leisure the most.

b. Total supply for a wage of 15:

= Joey supply + Mandy supply + Jim supply

= 12 + 8 + 9

= 29 units

c. If demand for labor was fixed at 18:

The equilibrium wage would be the wage that gets those 18 units of labor.

That wage is $10.

At $10, the labor units supplied by all 3 people is:

= 8 + 4 + 6

=18 units