A large manufacturing plant is the only major employer in a small, isolated town. Currently, it employs 100 people at an hourly wage of $20. To attract one more worker, the plant finds it must raise the wage to $20.25 per hour. Assuming the plant cannot pay different wages for the same job, what is the primary reason the firm might decide not to hire the 101st worker, even if that worker is expected to generate $22 worth of value per hour?

Analyzing Labor Hiring and Power

The True Cost of a New Hire

For a firm that is the sole major employer in a town, the decision to hire an additional worker should be made if the revenue generated by that new worker exceeds the wage paid to them.

The Profit Motive for Limiting Employment

A firm is the only major employer in a region and must raise its hourly pay rate for all employees to attract more workers. Match each concept related to this firm's hiring decision with its correct description.

Hiring Decision at Northwood Mills

Calculating the Marginal Cost of Labor

A pharmaceutical company is the only employer in a city for chemists with a rare, specialized skill. The company could increase its research output by hiring more of these chemists. However, to attract additional specialists from other regions, it would have to offer a higher salary. Due to its compensation policy, this new, higher salary would have to be paid to all of its current chemists as well. Which statement best analyzes the primary economic reason the company might choose not to hire more chemists, even if their individual output would be profitable at the new salary?

A remote mining company is the only employer in its town. It currently employs 200 people at an hourly wage of $30. To attract an additional worker, the company finds it must raise the hourly wage to $30.10 for all employees. The effective hourly cost of hiring this 201st worker is $____.