Question 1

Monopolies tend to

Accepted Answer

A)  hire more labor than duopolists or competitive firms, hence they are inefficient. 
B)  hire more labor than competitive firms but less than duopolists. 
C)  hire less labor than competitive firms because they produce at an inefficient level. 
D)  hire more labor because they produce at an inefficient level. 
A)  hire more labor than duopolists or competitive firms, hence they are inefficient. 
B)  hire more labor than competitive firms but less than duopolists. 
C)  hire less labor than competitive firms because they produce at an inefficient level. 
D)  hire more labor because they produce at an inefficient level.

Question 2

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 creates a de facto

Accepted Answer

A)  monopolist. 
B)  monopsony. 
C)  duopoly. 
D)  bilateral monopoly. 
A)  monopolist. 
B)  monopsony. 
C)  duopoly. 
D)  bilateral monopoly.

Question 3

In a market where one unit of labor produces one unit of output,consumers prefer

Accepted Answer

A)  a competitive labor market and a monopoly output market. 
B)  a competitive output market and a monopoly labor market. 
C)  a monopoly output market and a monopoly labor market. 
D)  None of the above-they are indifferent between A and B. 
A)  a competitive labor market and a monopoly output market. 
B)  a competitive output market and a monopoly labor market. 
C)  a monopoly output market and a monopoly labor market. 
D)  None of the above-they are indifferent between A and B.

Question 4

During the Black Plague,capital became worthless.What can explain this?

Accepted Answer

A)  Capital's marginal product fell because there was less labor. 
B)  Capitalists died off at a greater rate than the workers. 
C)  Capital's marginal product increased but the marginal product of labor decreased. 
D)  Workers forgot how to use the capital. 
A)  Capital's marginal product fell because there was less labor. 
B)  Capitalists died off at a greater rate than the workers. 
C)  Capital's marginal product increased but the marginal product of labor decreased. 
D)  Workers forgot how to use the capital.

Question 5

The demand for a monopoly's output is p = 50 - Q.The monopoly's marginal cost is $4 and the market wage is $2.How many units of labor are demanded by the monopoly?

Accepted Answer

A)  L = 46 
B)  L = 23 
C)  L = 0 
D)  L = 10 
A)  L = 46 
B)  L = 23 
C)  L = 0 
D)  L = 10

Question 6

A firm uses labor and capital in its production process,and it faces competitive markets for its inputs and output.The firm's long-run labor demand curve

Accepted Answer

A)  intersects with the short-run labor demand curve in several points. 
B)  is exactly identical to its short-run labor demand curve. 
C)  is steeper than its short-run labor demand curve. 
D)  is flatter than its short-run labor demand curve. 
A)  intersects with the short-run labor demand curve in several points. 
B)  is exactly identical to its short-run labor demand curve. 
C)  is steeper than its short-run labor demand curve. 
D)  is flatter than its short-run labor demand curve.

Question 7

How does a competitive firm's demand for labor react to a specific tax on each unit of output it sells?

Accepted Answer

The price the firm receives for each uni

Question 8

-The above figure shows a competitive firm's demand for labor assuming that the firm's output sells for $1 per unit.If the wage is $5 per hour,a ten cent specific tax on the good sold by the firm will cause the firm to

Accepted Answer

A)  demand less labor. 
B)  demand more labor. 
C)  offer its workers only $4.90 per hour. 
D)  hire 0 units of labor per hour. 
A)  demand less labor. 
B)  demand more labor. 
C)  offer its workers only $4.90 per hour. 
D)  hire 0 units of labor per hour.

Question 9

The long-run labor demand curve is relatively flatter than the short-run labor demand curve because,in the short run,

Accepted Answer

A)  the wage rate is fixed. 
B)  the firm cannot vary the amount of capital used. 
C)  the firm is a price taker. 
D)  All of the above. 
A)  the wage rate is fixed. 
B)  the firm cannot vary the amount of capital used. 
C)  the firm is a price taker. 
D)  All of the above.

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.After a specified amount of time,the player can become a free agent.This implies that,everything else equal,

Accepted Answer

A)  the player's salary is probably higher as a free agent than as a reserve player. 
B)  the player's salary is probably lower as a free agent than as a reserve player. 
C)  the player's salary is probably the same as a free agent and as a reserve player. 
D)  the free agent status is not granted to every player. 
A)  the player's salary is probably higher as a free agent than as a reserve player. 
B)  the player's salary is probably lower as a free agent than as a reserve player. 
C)  the player's salary is probably the same as a free agent and as a reserve player. 
D)  the free agent status is not granted to every player.

Question 11

If workers suddenly decide to value more their leisure time than before,this

Accepted Answer

A)  shifts the labor supply curve to the left, resulting in a wage increase and less workers hired. 
B)  shifts the labor supply curve to the right, resulting in a wage increase and less workers hired. 
C)  shifts the labor supply curve to the left, resulting in a wage decrease and less workers hired. 
D)  shifts the labor supply curve to the right, resulting in a wage increase and more workers hired. 
A)  shifts the labor supply curve to the left, resulting in a wage increase and less workers hired. 
B)  shifts the labor supply curve to the right, resulting in a wage increase and less workers hired. 
C)  shifts the labor supply curve to the left, resulting in a wage decrease and less workers hired. 
D)  shifts the labor supply curve to the right, resulting in a wage increase and more workers hired.

Question 12

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 13

Suppose the labor market is competitive,the supply curve of labor is upward sloping,and the amount of capital is fixed.If the output market changes from a competitive market to a monopoly,what is the effect on its demand for labor? Explain.

Accepted Answer

A monopoly will decrease outpu

Question 14

In a perfectly competitive resource market the Marginal Revenue Product Curve is

Accepted Answer

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

Question 15

Relative to a competitive labor market,monopsony

Accepted Answer

A)  is also efficient. 
B)  creates a deadweight loss because it pays an excessive wage. 
C)  creates a deadweight loss because the wage is below the marginal revenue product of labor. 
D)  creates a deadweight loss because the wage is above the marginal revenue product of labor. 
A)  is also efficient. 
B)  creates a deadweight loss because it pays an excessive wage. 
C)  creates a deadweight loss because the wage is below the marginal revenue product of labor. 
D)  creates a deadweight loss because the wage is above the marginal revenue product of labor.

Question 16

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 17

If a firm buys some labor in a competitive market and some labor as a monopsonist,the firm is most likely to

Accepted Answer

A)  pay the same wage to both types of labor. 
B)  pay a lower wage to the labor purchased in the competitive market. 
C)  pay a higher wage to the labor purchased in the competitive market. 
D)  not exercise any of its monopsony power. 
A)  pay the same wage to both types of labor. 
B)  pay a lower wage to the labor purchased in the competitive market. 
C)  pay a higher wage to the labor purchased in the competitive market. 
D)  not exercise any of its monopsony power.

Question 18

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 19

A monopsonist purchaser of labor that could negotiate a different wage for each worker could

Accepted Answer

A)  purchase less labor than a regular monopsonist. 
B)  purchase more labor than a regular monopsonist. 
C)  rotate the marginal expenditure curve to the left. 
D)  shift the marginal expenditure curve to the left. 
A)  purchase less labor than a regular monopsonist. 
B)  purchase more labor than a regular monopsonist. 
C)  rotate the marginal expenditure curve to the left. 
D)  shift the marginal expenditure curve to the left.

Question 20

Monopolization of the labor market restricts output because

Accepted Answer

A)  fewer workers offer their services. 
B)  the higher wage raises the firm's marginal cost. 
C)  monopolized workers are less productive. 
D)  a monopolized labor market means there is also a monopolized output market. 
A)  fewer workers offer their services. 
B)  the higher wage raises the firm's marginal cost. 
C)  monopolized workers are less productive. 
D)  a monopolized labor market means there is also a monopolized output market.

Monopolies tend to

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 creates a de facto

In a market where one unit of labor produces one unit of output,consumers prefer

During the Black Plague,capital became worthless.What can explain this?

The demand for a monopoly's output is p = 50 - Q.The monopoly's marginal cost is $4 and the market wage is $2.How many units of labor are demanded by the monopoly?

A firm uses labor and capital in its production process,and it faces competitive markets for its inputs and output.The firm's long-run labor demand curve

How does a competitive firm's demand for labor react to a specific tax on each unit of output it sells?

-The above figure shows a competitive firm's demand for labor assuming that the firm's output sells for $1 per unit.If the wage is $5 per hour,a ten cent specific tax on the good sold by the firm will cause the firm to

The long-run labor demand curve is relatively flatter than the short-run labor demand curve because,in the short run,

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.After a specified amount of time,the player can become a free agent.This implies that,everything else equal,

If workers suddenly decide to value more their leisure time than before,this

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

Suppose the labor market is competitive,the supply curve of labor is upward sloping,and the amount of capital is fixed.If the output market changes from a competitive market to a monopoly,what is the effect on its demand for labor? Explain.

In a perfectly competitive resource market the Marginal Revenue Product Curve is

Relative to a competitive labor market,monopsony

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

If a firm buys some labor in a competitive market and some labor as a monopsonist,the firm is most likely to

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

A monopsonist purchaser of labor that could negotiate a different wage for each worker could

Monopolization of the labor market restricts output because

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

Monopolies tend to

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 creates a de facto

In a market where one unit of labor produces one unit of output,consumers prefer

During the Black Plague,capital became worthless.What can explain this?

The demand for a monopoly's output is p = 50 - Q.The monopoly's marginal cost is $4 and the market wage is $2.How many units of labor are demanded by the monopoly?

A firm uses labor and capital in its production process,and it faces competitive markets for its inputs and output.The firm's long-run labor demand curve

How does a competitive firm's demand for labor react to a specific tax on each unit of output it sells?

-The above figure shows a competitive firm's demand for labor assuming that the firm's output sells for $1 per unit.If the wage is $5 per hour,a ten cent specific tax on the good sold by the firm will cause the firm to

The long-run labor demand curve is relatively flatter than the short-run labor demand curve because,in the short run,

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.After a specified amount of time,the player can become a free agent.This implies that,everything else equal,

If workers suddenly decide to value more their leisure time than before,this

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

Suppose the labor market is competitive,the supply curve of labor is upward sloping,and the amount of capital is fixed.If the output market changes from a competitive market to a monopoly,what is the effect on its demand for labor? Explain.

In a perfectly competitive resource market the Marginal Revenue Product Curve is

Relative to a competitive labor market,monopsony

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

If a firm buys some labor in a competitive market and some labor as a monopsonist,the firm is most likely to

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

A monopsonist purchaser of labor that could negotiate a different wage for each worker could

Monopolization of the labor market restricts output because

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