The Effort of a Firm's Workers Depends on Their Real

question 47

Essay

The effort of a firm's workers depends on their real wage according to the following schedule: $$\begin{array} { c c } \text { Real wage } & \text { Effort } ( E ) \\\hline 16 & 10 \\17 & 13 \\18 & 18 \\19 & 22 \\20 & 25 \\21 & 26 \\\hline\end{array}$$ The marginal product of labour is MPN = E(400 - 4N)/30.
a. What is the efficiency wage?
b. How many workers will the firm hire?
c. Suppose an adverse productivity shock reduces the marginal product of labour to
MPN = E(360 - 4N)/30. How would your answers to parts (a) and (b) change?

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Definitions:

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The process of restructuring the operations, structure, or ownership of companies in an industry to increase efficiency or adapt to market changes.

Implementation

The part of the entrepreneurial process that occurs when the organization is formed.

Entrepreneurial Process

It involves identifying a business opportunity, developing resources, and managing the business to achieve objectives.