1.Let's look at 100 computer programmers who are trying to decide whether to work for one of two companies: Robotron or Korrexia. To keep things simple, assume that both companie are equally fun to work for, so you don't need to worry about compen ating differentials here.

The marginal product of labor (per additional hour of work) is in the table below:

Number of Programmers per Firm 10 20 30 40 50 60 70 80 90 100 Robotron's MPL

$200

$150

$120

$110

$80

$60

$50

$40

$20

$10 Korrexia's MPL

$110

$80

$60

$50

$40

$20

$10

$0

$0

$0

a. These two firms are the whole market for pro grammer labor. In the table below, e timate the programmer demand curve by adding up the quantity of programmers demanded at each wage. For example, at a wage of $80 per hour, Robotron would hire 50 workers (since the first 50 workers have a MPL ~80) and Korrexia 20, so the total demand is 70 workers.

Wage

$200

$150

$1 20

$110

$80

$60

$50

$40

$20

$10 Number of Programmers Demanded 10 50 + 20 = 70

b. The programmers in this town are going to work at one of these two places for sure:

Their labor supply is vertical, or in other words, perfectly inelastic, with supply = 100.

So, what will the equilibrium wage be? Just a in Figure 17.1, the numbers may not work out exactly- so use your judgment to come up with a good answer.

c. Now, head back to the first table: About how many programmers will work at R obotron and how many at Korrexia? Again, use your j udgment to come up with a good answer.

d. Suppose 50 more programmers come to town. What will the wage be now? And how many will work at each firm?