Suppose in a Small Community Workers Can Find Employment in Two

question 95

Essay

Suppose in a small community workers can find employment in two industries: Clothing and Steel. In the Clothing industry, the marginal product of labor is always 1. In the Steel industry, the marginal product of labor is 12L_S^.5 -2, where L_S is the total number of workers employed in the Steel sector. The total supply of labor in this community is fixed at L_C +L_S =25, and the output price is 1 for both Clothing and Steel. a)Suppose that the labor market is perfectly competitive. How many workers will be employed in the Clothing sector, and how many in the Steel sector? b)What wage rate will workers in each sector receive?

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Definitions:

Membrane-bound Receptor

A type of receptor that is attached to the cell membrane and is involved in signaling pathways following the binding of a ligand.

Cyclic AMP

A second messenger molecule important in many biological processes, such as signal transduction and intracellular communication.

Adenylyl Cyclase

An enzyme that converts ATP to cyclic AMP, playing a critical role in cell signaling pathways.

Endocrine

Pertains to the system of glands that release hormones directly into the bloodstream to regulate body functions.