Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In January, General Motors laid off 2,000 workers. Suppose you are hired as a consultant to estimate the impact of these layoffs on the number

In January, General Motors laid off 2,000 workers. Suppose you are hired as a consultant to estimate the impact of these layoffs on the number of cars that GM will be able to produce this year. To do so, you need to estimate the marginal productivity of workers at GM. You go to the company's web page and learn that the company pays the average worker $140,000 per year and is able to sell the average car for $20,000. If the labor market for automobile workers is perfectly competitive (firms take output and input prices as given), is this enough information to calculate the marginal productivity of workers at the company? If not, what is the most that you can say about the marginal productivity of workers at GM given this information?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Technical Change, Relative Prices, And Environmental Resource Evaluation

Authors: V Kerry Smith

1st Edition

1317358570, 9781317358572

More Books

Students also viewed these Economics questions

Question

6. How can hidden knowledge guide our actions?

Answered: 1 week ago