ppendix Problems -20 Points Help Save & Ex Suppose that a car factory initially
ID: 2441182 • Letter: P
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ppendix Problems -20 Points Help Save & Ex Suppose that a car factory initially hires 1,400 workers at $40 per hour and that each worker works 40 hours per week. Then the factory unionizes, and the new union demands that wages be raised by 20 percent. The firm accedes to that request in collective bargaining negotiations but then decides to cut the factory's labor force by 25 percent due to the higher labor costs. Instructions: Enter your answers as whole numbers a. What is the new union wage? How many workers does the factory employ after the agreement goes into effect? b. How much in total did the factory's workers receive in wage payments each week before the agreement? How much do the factory's remaining workers receive in wage payments each week after the agreement? c. Suppose that the workers who lose their jobs as a result of the agreement end up unemployed. By how much do the total wages received each week by the initial 1,400 workers (both those who continue to be employed at the factory and those who change from before the agreement to after the agreement? Total wages (Click to select by $ they work 40 hours per week, by how much do the total wages received each week by the initial 1,400 workers change from before the agreement to after the agreement? d. If the workers who lose their jobs as a result of the agreement end up making $15 per hour at jobs where Total wages (Cick to select by $Explanation / Answer
(a)
Initial wage = $40 per week
Raise demanded by union = 10% or 0.10
New union wage = 40 + (40*0.10) = 40 + 4 = $44 per week
The New Union wage is $44 per week.
Total workers employed = 1,400 workers
Percentage decrease in workforce = 20% or 0.20
Decrease = 1,400 * 0.20 = 280
Workers employed after agreement = Total workforce before agreement - Decrease in workforce
= 1,400 workers - 280 workers
= 1,120 workers
The factory employs 1,120 workers after the agreement.
(b)
Total workers employed = 1,400 workers
Wages per hour = $40 per hour
Hours worked in a week = 40 hours
Total wages paid = 1,400 * 40 * 40 = $2,240,000
The factory's workers receive in wage payments $2,240,000 each week before the agreement.
Total workers employed after the agreement = 1,120 workers
Wage per hour = $44 per hour
Hours worked in a week = 40 hours
Total wages paid = 1,120 * 44 * 40 = $1,971,200
The factory's remaining workers receive in wage payments $1,971,200 each week after agreement.
(c)
Total wages before agreement = $2,240,000
Total wages after agreement = $1,971,200
Decrease in total wages = $2,240,000 - $1,971,200 = $268,800
So,
Total wages fall by $268,800.
(d)
Total wages before agreement = $2,224,000
Total wages after agreement = $1,971,200
Total wages earned by laid off workers = 280 * $15 * 40 = $168,000
Decrease = $2,224,000 - $1,971,200 - $168,000
Decrease = $100,800
So,
Total wages fall by $100,800.
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