Question 1

The wage paid by a firm buying labor in a monopsonistic market:

Accepted Answer

A)  is greater than the wage in the situation where the monopsony firm was broken up into a large number of firms buying inputs in a perfectly competitive factor market. 
B)  is equal to the wage in the situation where the monopsony firm was broken up into a large number of firms buying inputs in a perfectly competitive factor market. 
C)  decreases with the quantity of labor hired. 
D)  increases with the quantity of labor hired. 
A)  is greater than the wage in the situation where the monopsony firm was broken up into a large number of firms buying inputs in a perfectly competitive factor market. 
B)  is equal to the wage in the situation where the monopsony firm was broken up into a large number of firms buying inputs in a perfectly competitive factor market. 
C)  decreases with the quantity of labor hired. 
D)  increases with the quantity of labor hired.

Question 2

A profit-maximizing firm following the marginal decision rule will:

Accepted Answer

A)  hire more labor if MRP  MFC. 
C)  hire labor up to the point where MRP = MFC. 
D)  hire more labor if MRP = 0. 
A)  hire more labor if MRP  MFC. 
C)  hire labor up to the point where MRP = MFC. 
D)  hire more labor if MRP = 0.

Question 3

Use the following to answer question(s): Supply and Marginal Factor Cost
  
-(Exhibit: Supply and Marginal Factor Cost) How many factors will be supplied at a factor price of $10?

Accepted Answer

A)  3 
B)  4 
C)  5 
D)  It cannot be determined. 
A)  3 
B)  4 
C)  5 
D)  It cannot be determined.

Question 4

Monopsonistic input markets and monopolistic output markets are similar in that both generate:

Accepted Answer

A)  market prices that are not equal to opportunity costs. 
B)  market prices that are greater than opportunity costs. 
C)  market prices that are less than opportunity costs. 
D)  an overproduction of output. 
A)  market prices that are not equal to opportunity costs. 
B)  market prices that are greater than opportunity costs. 
C)  market prices that are less than opportunity costs. 
D)  an overproduction of output.

Question 5

A factor market containing one buyer and one seller is:

Accepted Answer

A)  a monopoly. 
B)  a monopsony. 
C)  perfect competition. 
D)  a bilateral monopoly. 
A)  a monopoly. 
B)  a monopsony. 
C)  perfect competition. 
D)  a bilateral monopoly.

Question 6

Use the following to answer question(s): Wage-Employment Model in a Bilateral Monopoly Market
  
-(Exhibit: Wage-Employment Model in a Bilateral Monopoly Market) If both buyers and sellers agreed to a wage of 0J, employment would be:

Accepted Answer

A)  0N. 
B)  0S. 
C)  0T. 
D)  indeterminate. 
A)  0N. 
B)  0S. 
C)  0T. 
D)  indeterminate.

Question 7

Labor unions are constrained in their wage demands because:

Accepted Answer

A)  the labor demand curve is downward sloping. 
B)  legislation limits wage increases in much of the economy. 
C)  most unions face very strong monopsonies. 
D)  workers prefer to "go along to get along." 
A)  the labor demand curve is downward sloping. 
B)  legislation limits wage increases in much of the economy. 
C)  most unions face very strong monopsonies. 
D)  workers prefer to "go along to get along."

Question 8

An industrial union is best defined as a union composed of workers from:

Accepted Answer

A)  the same industry. 
B)  all industries in the country. 
C)  the same skilled occupation. 
D)  different skilled occupations. 
A)  the same industry. 
B)  all industries in the country. 
C)  the same skilled occupation. 
D)  different skilled occupations.

Question 9

Prior to 1977, the market for baseball players was an example of a perfectly competitive factor market.

Accepted Answer

A) True 
 B)False

Question 10

Salary differences of high-paid athletes and lower-paid athletes often reflect differences in their marginal revenue products.

Accepted Answer

A) True 
 B)False

Question 11

Suppose that the labor market for clerical workers in a major city includes 10,000 employers and 100,000 workers.The model that best fits this situation is:

Accepted Answer

A)  monopoly. 
B)  monopsony. 
C)  bilateral monopoly. 
D)  perfect competition. 
A)  monopoly. 
B)  monopsony. 
C)  bilateral monopoly. 
D)  perfect competition.

Question 12

Suppose that wages paid to both factory workers and construction workers in a perfectly competitive factor market is $15 per hour.If the market for factory workers becomes unionized, you would expect:

Accepted Answer

A)  an increase in the supply of factory workers. 
B)  an increase in the wage rate for factory workers. 
C)  an increase in the wage rate for construction workers. 
D)  no change in the wage rate for either factory workers or construction workers. 
A)  an increase in the supply of factory workers. 
B)  an increase in the wage rate for factory workers. 
C)  an increase in the wage rate for construction workers. 
D)  no change in the wage rate for either factory workers or construction workers.

Question 13

A market in which there is a single buyer of a good, service, or factor of production is a(n):

Accepted Answer

A)  duopoly. 
B)  oligopoly. 
C)  monopoly. 
D)  monopsony. 
A)  duopoly. 
B)  oligopoly. 
C)  monopoly. 
D)  monopsony.

Question 14

A firm will hire labor at the quantity where MRP = MFC.

Accepted Answer

A) True 
 B)False

Question 15

A _______ has _______ power if it faces a(n) _______ curve for a factor of production.

Accepted Answer

A)  buyer; monopoly; upward-sloping supply 
B)  seller; monopoly; upward-sloping demand 
C)  buyer; monopsony; upward-sloping supply 
D)  buyer; monopsony; horizontal supply 
A)  buyer; monopoly; upward-sloping supply 
B)  seller; monopoly; upward-sloping demand 
C)  buyer; monopsony; upward-sloping supply 
D)  buyer; monopsony; horizontal supply

Question 16

Suppose that a firm hiring labor in a perfectly competitive factor market increases the quantity of labor from 10 workers to 11 workers.If the market wage is $20 per worker, the marginal factor cost for the eleventh worker is:

Accepted Answer

A)  $9. 
B)  $10. 
C)  $20. 
D)  $220. 
A)  $9. 
B)  $10. 
C)  $20. 
D)  $220.

Question 17

An industrial union, operating in an otherwise competitive labor market, that cannot either increase the demand for or decrease the supply of labor is likely to try to:

Accepted Answer

A)  lower the wage, with the result that employment falls. 
B)  raise the wage, with the result that employment rises. 
C)  lower the wage, with the result that employment rises. 
D)  raise the wage, with the result that employment falls. 
A)  lower the wage, with the result that employment falls. 
B)  raise the wage, with the result that employment rises. 
C)  lower the wage, with the result that employment rises. 
D)  raise the wage, with the result that employment falls.

Question 18

Use the following to answer question(s): Monopsony
  
-(Exhibit: Monopsony) Given monopsony in the factor market, the wage would be:

Accepted Answer

A) determined where MRP > MFC. B) determined where MRP < MFC. C) W₂. D) W₁. A) determined where MRP > MFC. B) determined where MRP < MFC. C) W₂. D) W₁.

Question 19

In a competitive labor market, a minimum wage will:

Accepted Answer

A)  establish a price ceiling and lead to unemployment. 
B)  help all workers. 
C)  reduce employment. 
D)  be impossible to enforce. 
A)  establish a price ceiling and lead to unemployment. 
B)  help all workers. 
C)  reduce employment. 
D)  be impossible to enforce.

Question 20

The monopsony model predicts that athletes facing monopsony employers will receive _______ that are ________ than their _______ .

Accepted Answer

A)  wages; less; MRPs 
B)  MRPs; greater; MFCs 
C)  wages; greater; MRPs 
D)  MFCs; greater; MRPs 
A)  wages; less; MRPs 
B)  MRPs; greater; MFCs 
C)  wages; greater; MRPs 
D)  MFCs; greater; MRPs

The wage paid by a firm buying labor in a monopsonistic market:

A profit-maximizing firm following the marginal decision rule will:

Use the following to answer question(s): Supply and Marginal Factor Cost -(Exhibit: Supply and Marginal Factor Cost) How many factors will be supplied at a factor price of $10?

Monopsonistic input markets and monopolistic output markets are similar in that both generate:

A factor market containing one buyer and one seller is:

Use the following to answer question(s): Wage-Employment Model in a Bilateral Monopoly Market -(Exhibit: Wage-Employment Model in a Bilateral Monopoly Market) If both buyers and sellers agreed to a wage of 0J, employment would be:

Labor unions are constrained in their wage demands because:

An industrial union is best defined as a union composed of workers from:

Prior to 1977, the market for baseball players was an example of a perfectly competitive factor market.

Salary differences of high-paid athletes and lower-paid athletes often reflect differences in their marginal revenue products.

Suppose that the labor market for clerical workers in a major city includes 10,000 employers and 100,000 workers.The model that best fits this situation is:

Suppose that wages paid to both factory workers and construction workers in a perfectly competitive factor market is $15 per hour.If the market for factory workers becomes unionized, you would expect:

A market in which there is a single buyer of a good, service, or factor of production is a(n):

A firm will hire labor at the quantity where MRP = MFC.

A ___ has _ power if it faces a(n) _____ curve for a factor of production.

Suppose that a firm hiring labor in a perfectly competitive factor market increases the quantity of labor from 10 workers to 11 workers.If the market wage is $20 per worker, the marginal factor cost for the eleventh worker is:

An industrial union, operating in an otherwise competitive labor market, that cannot either increase the demand for or decrease the supply of labor is likely to try to:

Use the following to answer question(s): Monopsony -(Exhibit: Monopsony) Given monopsony in the factor market, the wage would be:

In a competitive labor market, a minimum wage will:

The monopsony model predicts that athletes facing monopsony employers will receive _ that are than their _ .

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 14: Imperfectly Competitive Markets for Factors of Production

The wage paid by a firm buying labor in a monopsonistic market:

A profit-maximizing firm following the marginal decision rule will:

Use the following to answer question(s): Supply and Marginal Factor Cost -(Exhibit: Supply and Marginal Factor Cost) How many factors will be supplied at a factor price of $10?

Monopsonistic input markets and monopolistic output markets are similar in that both generate:

A factor market containing one buyer and one seller is:

Use the following to answer question(s): Wage-Employment Model in a Bilateral Monopoly Market -(Exhibit: Wage-Employment Model in a Bilateral Monopoly Market) If both buyers and sellers agreed to a wage of 0J, employment would be:

Labor unions are constrained in their wage demands because:

An industrial union is best defined as a union composed of workers from:

Prior to 1977, the market for baseball players was an example of a perfectly competitive factor market.

Salary differences of high-paid athletes and lower-paid athletes often reflect differences in their marginal revenue products.

Suppose that the labor market for clerical workers in a major city includes 10,000 employers and 100,000 workers.The model that best fits this situation is:

Suppose that wages paid to both factory workers and construction workers in a perfectly competitive factor market is $15 per hour.If the market for factory workers becomes unionized, you would expect:

A market in which there is a single buyer of a good, service, or factor of production is a(n):

A firm will hire labor at the quantity where MRP = MFC.

A _______ has _______ power if it faces a(n) _______ curve for a factor of production.

Suppose that a firm hiring labor in a perfectly competitive factor market increases the quantity of labor from 10 workers to 11 workers.If the market wage is $20 per worker, the marginal factor cost for the eleventh worker is:

An industrial union, operating in an otherwise competitive labor market, that cannot either increase the demand for or decrease the supply of labor is likely to try to:

Use the following to answer question(s): Monopsony -(Exhibit: Monopsony) Given monopsony in the factor market, the wage would be:

In a competitive labor market, a minimum wage will:

The monopsony model predicts that athletes facing monopsony employers will receive _______ that are ________ than their _______ .

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

Monopoly

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

A ___ has _ power if it faces a(n) _____ curve for a factor of production.

The monopsony model predicts that athletes facing monopsony employers will receive _ that are than their _ .