## ECO 2023 Principles of Microeconomics Homework Assignment #8 (Chapter 11)

Question 1
Suppose you are currently unemployed and are looking for a job. You notice that the newspaper corporation, The Daily Bugle, is hiring reporters and photographers.
a) Remember that economists believe that you can divide your time (24 hours/day) into two different activities. According to the lectures, what are these activities?
b) For you personally, what would be your reservation wage to work for the company? What does this wage mean for you?
c) Suppose the company offers you a wage rate of \$17.50/hour. For you personally, how many hours of work (in a day) would you perform for the firm?
d) Suppose the company offers you a wage rate of \$10,000/hour. For you personally, how many hours of work (in a day) would you perform for the firm?
e) For you personally, what wage rate would the company have to pay you in order to spend your entire day working?
f) Draw your individual labor supply curve using the specific numbers you provided above.
g) What shape does it take? Label where the substitution effect is dominant, where the income effect is dominant, and where the two effects cancel each other out. Make sure that the wages your wages in the previous questions are consistent with the shape of your individual labor supply curve.
h) What does it mean for the substitution effect to be dominant for you?
i) What does it mean for the income effect to be dominant for you?
j) How does this differ from the market labor supply curve?

Question 2
T’Challa is the chief of the country Wakanda, and he wants to mine vibranium from the country’s mines. He can sell each unit of the good for \$10 while it cost him \$400 to employ each worker. His chief advisor provides him with the table below.

Question 3
Suppose you have accepted the job at The Daily Bugle, and there are talks about the workers forming a union.
a) Briefly list and describe the different types of union structures talked about in the lectures.
b) Would you personally join the union? Why or why not? Provide at least five sentences showing your reasoning.
c) What kind of things would you personally like the union to negotiate for during the collective bargaining talks? List at least three items.