Question 1

A minimum wage set at the competitive market wage level affects the monopsonist by

Accepted Answer

A)  altering its marginal expenditure curve and raising its employment level. 
B)  reducing its output. 
C)  altering the market supply curve. 
D)  altering its marginal expenditure curve and lowering its employment level. 
A)  altering its marginal expenditure curve and raising its employment level. 
B)  reducing its output. 
C)  altering the market supply curve. 
D)  altering its marginal expenditure curve and lowering its employment level.

Question 2

The demand for a monopoly's output is p = 100 - Q.The firm's production function is Q = 2L.Which of the following is the firm's demand for labor?

Accepted Answer

A)  w = 200 - 8L 
B)  w = 200 - 4L 
C)  w = 100 - L 
D)  w = 2L 
A)  w = 200 - 8L 
B)  w = 200 - 4L 
C)  w = 100 - L 
D)  w = 2L

Question 3

For the monopsonist,marginal expenditure is greater than the wage rate because the monopsonist

Accepted Answer

A)  pays a wage higher than that paid in a competitive market. 
B)  chooses the perfectly competitive quantity of labor. 
C)  must increase the wage to all units of labor to attract more units of labor. 
D)  must take the wage as given by the market. 
A)  pays a wage higher than that paid in a competitive market. 
B)  chooses the perfectly competitive quantity of labor. 
C)  must increase the wage to all units of labor to attract more units of labor. 
D)  must take the wage as given by the market.

Question 4

A firm faces competitive markets for its inputs and its output.At the profit-maximizing level of output,its marginal cost is $10 and the wage paid is $2.If the MPL = L-0.5,what is the marginal product of the firm?

Accepted Answer

A)  0.10 
B)  0.2 
C)  0.35 
D)  5 
A)  0.10 
B)  0.2 
C)  0.35 
D)  5

Question 5

If a firm takes the wage as given,then the firm's marginal expenditure on labor curve is

Accepted Answer

A)  above the labor supply curve. 
B)  below the labor supply curve. 
C)  the same as the labor supply curve. 
D)  upward sloping. 
A)  above the labor supply curve. 
B)  below the labor supply curve. 
C)  the same as the labor supply curve. 
D)  upward sloping.

Question 6

If workers are homogeneous and face a monopsonist,

Accepted Answer

A)  they are likely to want to form a union. 
B)  they are likely to want to negotiate one-on-one with their employer. 
C)  it is likely that half will want to form a union, half will not. 
D)  they are likely to move to another town. 
A)  they are likely to want to form a union. 
B)  they are likely to want to negotiate one-on-one with their employer. 
C)  it is likely that half will want to form a union, half will not. 
D)  they are likely to move to another town.

Question 7

A union's success in raising the wage depends on

Accepted Answer

A)  the elasticity of demand it faces. 
B)  members' ability to act collectively. 
C)  the share of the labor market that is unionized. 
D)  All of the above. 
A)  the elasticity of demand it faces. 
B)  members' ability to act collectively. 
C)  the share of the labor market that is unionized. 
D)  All of the above.

Question 8

If a firm takes the wage as given,then the supply curve of labor to that firm is

Accepted Answer

A)  horizontal. 
B)  vertical. 
C)  upward sloping. 
D)  downward sloping. 
A)  horizontal. 
B)  vertical. 
C)  upward sloping. 
D)  downward sloping.

Question 9

Firm A is a monopsonist that faces a labor supply elasticity of 2.4 whereas Firm B is a monopsonist that faces a labor supply elasticity of 1.4.Which of these monopsonists has a higher markup over wage?

Accepted Answer

A)  Firm A 
B)  Firm B 
C)  They both pay the same. 
D)  It is impossible to tell which pays a higher wage. 
A)  Firm A 
B)  Firm B 
C)  They both pay the same. 
D)  It is impossible to tell which pays a higher wage.

Question 10

In the first years of a professional athlete's career,the athlete is "under reserve," which means that he or she cannot negotiate with other teams.This implies that,everything else equal,

Accepted Answer

A)  the player's salary is probably higher than it otherwise would be. 
B)  the player's salary is probably lower than it otherwise would be. 
C)  the player's salary is probably the same as it otherwise would be. 
D)  the player is not hired by the team. 
A)  the player's salary is probably higher than it otherwise would be. 
B)  the player's salary is probably lower than it otherwise would be. 
C)  the player's salary is probably the same as it otherwise would be. 
D)  the player is not hired by the team.

Question 11

If the competitive firm maximizes profit by selecting labor rather than output,it will earn greater economic profit.

Accepted Answer

A) True 
 B)False

Question 12

A monopoly's demand curve for labor

Accepted Answer

A)  is below that of a competitive market. 
B)  is the same as that of a competitive market. 
C)  is above that of a competitive market. 
D)  equals p ∗ MPL. 
A)  is below that of a competitive market. 
B)  is the same as that of a competitive market. 
C)  is above that of a competitive market. 
D)  equals p ∗ MPL.

Question 13

In the short run,a competitive firm has a marginal product of labor,MPL = 5L-0.5.The output price is $10 per unit and the wage is $7 per hour.The short-run labor demand curve for the firm is

Accepted Answer

A)  5L-0.5. 
B)  15L-0.5. 
C)  35L-0.5. 
D)  50L-0.5. 
A)  5L-0.5. 
B)  15L-0.5. 
C)  35L-0.5. 
D)  50L-0.5.

Question 14

If a firm has market power in the output market but buys labor in a competitive market,it will hire the same quantity of labor that a competitive firm will.

Accepted Answer

A) True 
 B)False

Question 15

For a monopoly,the value of the next worker equals

Accepted Answer

A)  MR ∗ MPL. 
B)  p ∗ MPL. 
C)  MPL. 
D)  w/MPL. 
A)  MR ∗ MPL. 
B)  p ∗ MPL. 
C)  MPL. 
D)  w/MPL.

Question 16

Firm A is a monopsonist that faces a labor supply elasticity of 2.4 whereas Firm B is a monopsonist that faces a labor supply elasticity of 1.4.Which of these monopsonists pays a higher wage?

Accepted Answer

A)  Firm A 
B)  Firm B 
C)  They both pay the same. 
D)  It is impossible to tell which pays a higher wage. 
A)  Firm A 
B)  Firm B 
C)  They both pay the same. 
D)  It is impossible to tell which pays a higher wage.

Question 17

If a competitive firm faces a competitive labor market,it will hire labor until

Accepted Answer

A)  w = p. 
B)  w = MPL. 
C)  w = MPL ∗ p. 
D)  MPL = 0. 
A)  w = p. 
B)  w = MPL. 
C)  w = MPL ∗ p. 
D)  MPL = 0.

Question 18

Monopolization of both the labor market and the output market results in

Accepted Answer

A)  higher wages than when both are competitive. 
B)  a higher output price than when both are competitive. 
C)  a lower level of output than when both are competitive. 
D)  All of the above. 
A)  higher wages than when both are competitive. 
B)  a higher output price than when both are competitive. 
C)  a lower level of output than when both are competitive. 
D)  All of the above.

Question 19

Suppose that a mining company employs 80% of the available laborers in a town.Explain what will happen to the number of laborers hired and the wage rate paid by the mine if a minimum wage is set at the competitive level.

Accepted Answer

The mine was operating as a mo

Question 20

After Hurricane Katrina destroyed much of the infrastructure of the United States Gulf Coast,

Accepted Answer

A)  labor became more valuable. 
B)  labor became less valuable because of the capital that had been destroyed. 
C)  labor became less valuable because FEMA's response wasn't timely. 
D)  labor became more valuable because of the rebuilding effort. 
A)  labor became more valuable. 
B)  labor became less valuable because of the capital that had been destroyed. 
C)  labor became less valuable because FEMA's response wasn't timely. 
D)  labor became more valuable because of the rebuilding effort.

A minimum wage set at the competitive market wage level affects the monopsonist by

The demand for a monopoly's output is p = 100 - Q.The firm's production function is Q = 2L.Which of the following is the firm's demand for labor?

For the monopsonist,marginal expenditure is greater than the wage rate because the monopsonist

A firm faces competitive markets for its inputs and its output.At the profit-maximizing level of output,its marginal cost is $10 and the wage paid is $2.If the MPL = L^-0.5,what is the marginal product of the firm?

If a firm takes the wage as given,then the firm's marginal expenditure on labor curve is

If workers are homogeneous and face a monopsonist,

A union's success in raising the wage depends on

If a firm takes the wage as given,then the supply curve of labor to that firm is

Firm A is a monopsonist that faces a labor supply elasticity of 2.4 whereas Firm B is a monopsonist that faces a labor supply elasticity of 1.4.Which of these monopsonists has a higher markup over wage?

In the first years of a professional athlete's career,the athlete is "under reserve," which means that he or she cannot negotiate with other teams.This implies that,everything else equal,

If the competitive firm maximizes profit by selecting labor rather than output,it will earn greater economic profit.

A monopoly's demand curve for labor

In the short run,a competitive firm has a marginal product of labor,MPL = 5L^-0.5.The output price is $10 per unit and the wage is $7 per hour.The short-run labor demand curve for the firm is

If a firm has market power in the output market but buys labor in a competitive market,it will hire the same quantity of labor that a competitive firm will.

For a monopoly,the value of the next worker equals

Firm A is a monopsonist that faces a labor supply elasticity of 2.4 whereas Firm B is a monopsonist that faces a labor supply elasticity of 1.4.Which of these monopsonists pays a higher wage?

If a competitive firm faces a competitive labor market,it will hire labor until

Monopolization of both the labor market and the output market results in

Suppose that a mining company employs 80% of the available laborers in a town.Explain what will happen to the number of laborers hired and the wage rate paid by the mine if a minimum wage is set at the competitive level.

After Hurricane Katrina destroyed much of the infrastructure of the United States Gulf Coast,

Introduction

Supply and Demand

Applying the Supply-And-Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 15: Factor Markets

A minimum wage set at the competitive market wage level affects the monopsonist by

The demand for a monopoly's output is p = 100 - Q.The firm's production function is Q = 2L.Which of the following is the firm's demand for labor?

For the monopsonist,marginal expenditure is greater than the wage rate because the monopsonist

A firm faces competitive markets for its inputs and its output.At the profit-maximizing level of output,its marginal cost is $10 and the wage paid is $2.If the MPL = L-0.5,what is the marginal product of the firm?

If a firm takes the wage as given,then the firm's marginal expenditure on labor curve is

If workers are homogeneous and face a monopsonist,

A union's success in raising the wage depends on

If a firm takes the wage as given,then the supply curve of labor to that firm is

Firm A is a monopsonist that faces a labor supply elasticity of 2.4 whereas Firm B is a monopsonist that faces a labor supply elasticity of 1.4.Which of these monopsonists has a higher markup over wage?

In the first years of a professional athlete's career,the athlete is "under reserve," which means that he or she cannot negotiate with other teams.This implies that,everything else equal,

If the competitive firm maximizes profit by selecting labor rather than output,it will earn greater economic profit.

A monopoly's demand curve for labor

In the short run,a competitive firm has a marginal product of labor,MPL = 5L-0.5.The output price is $10 per unit and the wage is $7 per hour.The short-run labor demand curve for the firm is

If a firm has market power in the output market but buys labor in a competitive market,it will hire the same quantity of labor that a competitive firm will.

For a monopoly,the value of the next worker equals

Firm A is a monopsonist that faces a labor supply elasticity of 2.4 whereas Firm B is a monopsonist that faces a labor supply elasticity of 1.4.Which of these monopsonists pays a higher wage?

If a competitive firm faces a competitive labor market,it will hire labor until

Monopolization of both the labor market and the output market results in

Suppose that a mining company employs 80% of the available laborers in a town.Explain what will happen to the number of laborers hired and the wage rate paid by the mine if a minimum wage is set at the competitive level.

After Hurricane Katrina destroyed much of the infrastructure of the United States Gulf Coast,

Introduction

Supply and Demand

Applying the Supply-And-Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Monopoly

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

A firm faces competitive markets for its inputs and its output.At the profit-maximizing level of output,its marginal cost is $10 and the wage paid is $2.If the MPL = L^-0.5,what is the marginal product of the firm?

In the short run,a competitive firm has a marginal product of labor,MPL = 5L^-0.5.The output price is $10 per unit and the wage is $7 per hour.The short-run labor demand curve for the firm is