Question 1

A change in the wage causes a shift in the supply curve for labor and a

Accepted Answer

A)  shift along the demand curve for labor. 
B)  shift in the demand curve for labor. 
C)  rotation in the demand curve for labor. 
D)  It cannot be determined by the information provided. 
A)  shift along the demand curve for labor. 
B)  shift in the demand curve for labor. 
C)  rotation in the demand curve for labor. 
D)  It cannot be determined by the information provided. A

Question 2

A firm faces competitive markets for its inputs and its output.Its marginal revenue product of labor

Accepted Answer

A)  is increasing in the output price. 
B)  is decreasing in the output price. 
C)  is independent of the output price. 
D)  has an inverted U-shape. 
A)  is increasing in the output price. 
B)  is decreasing in the output price. 
C)  is independent of the output price. 
D)  has an inverted U-shape. A

Question 3

If the labor market is competitive,a monopoly output market will result in

Accepted Answer

A)  a lower wage than that of a competitive output market. 
B)  a higher wage than that of a competitive output market. 
C)  less labor hired than in a competitive output market. 
D)  more labor hired than in a competitive output market. 
A)  a lower wage than that of a competitive output market. 
B)  a higher wage than that of a competitive output market. 
C)  less labor hired than in a competitive output market. 
D)  more labor hired than in a competitive output market. C

Question 4

Which of the following labor markets is more likely to be competitive?

Accepted Answer

A)  Receptionists 
B)  Singers 
C)  Soccer players 
D)  Sculptors 
A)  Receptionists 
B)  Singers 
C)  Soccer players 
D)  Sculptors

Question 5

A monopolist faces a market demand curve with a constant elasticity of -2.The monopoly's production function is Q = 4L and its output price is given by p.What is the monopoly's marginal revenue product of labor function?

Accepted Answer

A)  MRPL = 2p 
B)  MRPL = 4p 
C)  MRPL = 10 - 2p 
D)  MRPL = 5 + 3.5p 
A)  MRPL = 2p 
B)  MRPL = 4p 
C)  MRPL = 10 - 2p 
D)  MRPL = 5 + 3.5p

Question 6

Under monopsony,the wage rate

Accepted Answer

A)  equals the marginal product of labor. 
B)  equals the marginal revenue product of labor. 
C)  is less than the marginal revenue product of labor. 
D)  is greater than it would be under perfect competition. 
A)  equals the marginal product of labor. 
B)  equals the marginal revenue product of labor. 
C)  is less than the marginal revenue product of labor. 
D)  is greater than it would be under perfect competition.

Question 7

The demand for an input used in a fixed proportions technology

Accepted Answer

A)  is identical to the demand for the other inputs. 
B)  is greater than the demand for the end product itself. 
C)  lies below the demand for the end product itself. 
D)  is the same as the demand for the end product itself. 
A)  is identical to the demand for the other inputs. 
B)  is greater than the demand for the end product itself. 
C)  lies below the demand for the end product itself. 
D)  is the same as the demand for the end product itself.

Question 8

Which of the following would be most able to act like a monopsonist?

Accepted Answer

A)  a hospital in a small isolated town 
B)  a hospital in a very big city 
C)  a law firm in Washington, D.C. 
D)  a computer software firm in Silicon Valley 
A)  a hospital in a small isolated town 
B)  a hospital in a very big city 
C)  a law firm in Washington, D.C. 
D)  a computer software firm in Silicon Valley

Question 9

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 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

The amount of labor a firm employs depends on

Accepted Answer

A)  the market wage. 
B)  the market price for the good produced. 
C)  Both A and B. 
D)  None of the above. 
A)  the market wage. 
B)  the market price for the good produced. 
C)  Both A and B. 
D)  None of the above.

Question 12

The marginal expenditure of a monopsonist is $4.The wage it currently pays is $3.The labor supply curve has a constant elasticity.What is the elasticity of the labor supply?

Accepted Answer

A)  0.33 
B)  0.66 
C)  1 
D)  3 
A)  0.33 
B)  0.66 
C)  1 
D)  3

Question 13

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 14

If a firm pays its workers $10 per hour,the marginal product of labor is 5 units per hour,and the price of the firm's product is $15 per unit,what is the price elasticity of demand facing the firm?

Accepted Answer

A)  -1.15 
B)  -2.15 
C)  -1.0 
D)  -3.56 
A)  -1.15 
B)  -2.15 
C)  -1.0 
D)  -3.56

Question 15

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 16

If the supply of labor to a monopsonist is everywhere unit elastic,and the marginal expenditure equals $1,then the wage will equal

Accepted Answer

A)  $0.50. 
B)  $0.75. 
C)  $1.00. 
D)  $2.00. 
A)  $0.50. 
B)  $0.75. 
C)  $1.00. 
D)  $2.00.

Question 17

In the short run,which one of the following causes a competitive firm to hire more labor?

Accepted Answer

A)  an increase in wage rate 
B)  an increase in the output price 
C)  a specific tax imposed on the firm's output 
D)  a decrease in the output price 
A)  an increase in wage rate 
B)  an increase in the output price 
C)  a specific tax imposed on the firm's output 
D)  a decrease in the output price

Question 18

Explain why consumers benefit from a merger between a monopoly producer and its monopoly supplier of labor.

Accepted Answer

A monopoly supplier of labor s

Question 19

If the price of a competitive firm's output increases,the firm responds in the short run by demanding more labor.

Accepted Answer

A) True 
 B)False

Question 20

If an upstream monopoly and a downstream monopoly vertically integrate into a profit-maximizing monopoly,then the total amount of deadweight loss in the industry

Accepted Answer

A)  will increase. 
B)  will decrease. 
C)  will remain unchanged. 
D)  cannot be determined. 
A)  will increase. 
B)  will decrease. 
C)  will remain unchanged. 
D)  cannot be determined.

A change in the wage causes a shift in the supply curve for labor and a

A firm faces competitive markets for its inputs and its output.Its marginal revenue product of labor

If the labor market is competitive,a monopoly output market will result in

Which of the following labor markets is more likely to be competitive?

A monopolist faces a market demand curve with a constant elasticity of -2.The monopoly's production function is Q = 4L and its output price is given by p.What is the monopoly's marginal revenue product of labor function?

Under monopsony,the wage rate

The demand for an input used in a fixed proportions technology

Which of the following would be most able to act like a monopsonist?

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

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,

The amount of labor a firm employs depends on

The marginal expenditure of a monopsonist is $4.The wage it currently pays is $3.The labor supply curve has a constant elasticity.What is the elasticity of the labor supply?

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?

If a firm pays its workers $10 per hour,the marginal product of labor is 5 units per hour,and the price of the firm's product is $15 per unit,what is the price elasticity of demand facing the firm?

If workers are homogeneous and face a monopsonist,

If the supply of labor to a monopsonist is everywhere unit elastic,and the marginal expenditure equals $1,then the wage will equal

In the short run,which one of the following causes a competitive firm to hire more labor?

Explain why consumers benefit from a merger between a monopoly producer and its monopoly supplier of labor.

If the price of a competitive firm's output increases,the firm responds in the short run by demanding more labor.

If an upstream monopoly and a downstream monopoly vertically integrate into a profit-maximizing monopoly,then the total amount of deadweight loss in the industry

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 change in the wage causes a shift in the supply curve for labor and a

A firm faces competitive markets for its inputs and its output.Its marginal revenue product of labor

If the labor market is competitive,a monopoly output market will result in

Which of the following labor markets is more likely to be competitive?

A monopolist faces a market demand curve with a constant elasticity of -2.The monopoly's production function is Q = 4L and its output price is given by p.What is the monopoly's marginal revenue product of labor function?

Under monopsony,the wage rate

The demand for an input used in a fixed proportions technology

Which of the following would be most able to act like a monopsonist?

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

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,

The amount of labor a firm employs depends on

The marginal expenditure of a monopsonist is $4.The wage it currently pays is $3.The labor supply curve has a constant elasticity.What is the elasticity of the labor supply?

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?

If a firm pays its workers $10 per hour,the marginal product of labor is 5 units per hour,and the price of the firm's product is $15 per unit,what is the price elasticity of demand facing the firm?

If workers are homogeneous and face a monopsonist,

If the supply of labor to a monopsonist is everywhere unit elastic,and the marginal expenditure equals $1,then the wage will equal

In the short run,which one of the following causes a competitive firm to hire more labor?

Explain why consumers benefit from a merger between a monopoly producer and its monopoly supplier of labor.

If the price of a competitive firm's output increases,the firm responds in the short run by demanding more labor.

If an upstream monopoly and a downstream monopoly vertically integrate into a profit-maximizing monopoly,then the total amount of deadweight loss in the industry

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