Exam 10: Monopoly and Antitrust

Suppose the following two events occur in the market for elementary school teachers: a.Overcrowded schools and education budget cuts have discouraged young university students from pursuing careers in teaching. b.With an increasing birth rate,the number of children entering the primary school system is expected to increase significantly over the next ten years. What is likely to happen to the equilibrium wage and quantity of teachers as a result of these two events?

Table 10-3 Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets. The firm hires labour at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80. Table 10-3 shows the relationship between the quantity of labour it hires and the quantity of microwave ovens it produces. -Refer to Table 10-3.What is the amount of revenue added as a result of hiring the 4th worker?

Figure 10-4 -Refer to Figure 10-4.Which of the following is true at W₀?

What happens to the equilibrium wage and quantity of labour if output price rises?

If the labour demand curve shifts to the left and the labour supply curve remains unchanged,what will happen to the equilibrium wage and the equilibrium level of employment? Illustrate your answer with a graph.

An increase in the supply of capital,which is a complement to labour,will lead to

Roderick received a $100 savings bond for his graduation.The bond pays $100 at maturity,which is in five years.If the interest rate is 6 per cent,the bond has a present value of $90.09.

Table 10-1 -Refer to Table 10-1.Suppose the output price is $3.If the wage rate is $90,what is the profit-maximising quantity of labour that the firm should hire?

The market price of a factor of production that is in fixed supply is determined only by demand.

Along an upward-sloping labour supply curve,as the wage rate increases,the opportunity cost of leisure ________,causing individuals to supply a ________ quantity of labour.

If the substitution effect of a wage increase dominates the income effect,the labour supply curve has a positive slope.

Why is a dollar today more valuable than a dollar a year from now?

A successful compensation scheme

As non-union construction workers replace a unionised work force,the average wage in the construction sector is likely to rise.

Figure 10-2 Figure 10-2 shows the marginal revenue product for Becca's Baubles, a producer of hand-beaded bracelets. -Refer to Figure 10-2.If the wage rate is $20,how many workers should Becca hire?

What is the substitution effect of a wage increase? What is the income effect of a wage increase? Under what conditions will a worker's labour supply curve become downward sloping?

Economic rent is defined as

Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labour is the only input.If the last worker hired increases output by three units per hour,then to maximise profits the firm should

The demand for labour is described as a derived demand because

If you want to know the present value of $10 000 received in one year,and the interest rate is 4 per cent,what formula can you use?