Question 1

Use the following to answer question(s): Labor Market
 
-(Exhibit: Labor Market) Given competitive market demand curve D and union members supply curve S, an increase in the demand for the union-made product will result in a:

Accepted Answer

A)  new demand curve FTD′. 
B)  new supply curve FTS. 
C)  shift in the supply curve to S′. 
D)  shift in the demand curve to D′.

Question 2

Use the following to answer question(s): Supply and Marginal Factor Cost
 
-(Exhibit: Supply and Marginal Factor Cost) If the supply curve implied in this exhibit is faced by a single firm, it would be a firm:

Accepted Answer

A)  hiring in a perfectly competitive factor market 
B)  that is a price taker in the factor market. 
C)  that is called a monopoly seller in the factor market. 
D)  that is called a monopsony.

Question 3

The marginal factor cost curve for a monopsonist is:

Accepted Answer

A)  vertical. 
B)  horizontal. 
C)  negatively sloped. 
D)  positively sloped.

Question 4

The considerable differences in the wages of minor league athletes and major league athletes since 1977 is most likely due to:

Accepted Answer

A)  chance or luck. 
B)  work effort. 
C)  differences in their respective marginal revenue products. 
D)  the strength of the major league union.

Question 5

A monopsony is a market characterized by:

Accepted Answer

A)  one seller of an output. 
B)  one buyer of an input. 
C)  two buyers of an input. 
D)  many buyers of an input.

Question 6

Use the following to answer question 63-70.
Exhibit: Monopoly and Monopsony
 
-(Exhibit: Monopoly and Monopsony) In Panel (b), if activity is carried on at the maximizing level specified by the marginal decision rule:

Accepted Answer

A)  MFC  factor price. 
D)  MFC < MRP.

Question 7

Closed-shop arrangements:

Accepted Answer

A)  constitute the greatest percentage of unions. 
B)  are increasing in number. 
C)  have been declared illegal in the United States. 
D)  are generally found in states with right-to-work laws.

Question 8

A firm that has monopoly power in the supply of a factor makes choices in same manner as any other monopoly firm by selling where _______ and selecting a price determined by the _______ curve.

Accepted Answer

A)  MR = P; demand 
B)  MR = MC; supply 
C)  MR = MC; demand 
D)  MRP = MFC; supply

Question 9

Colleges and universities in small towns generally pay part-time instructors ________ they pay full-time instructors per credit-hour.

Accepted Answer

A)  more than 
B)  less than 
C)  about the same as 
D)  about 10 percent of what

Question 10

Use the following to answer question 63-70.
Exhibit: Monopoly and Monopsony
 
-(Exhibit: Monopoly and Monopsony) In Panel (a), if the quantity of production is carried to the right of point E:

Accepted Answer

A)  MR  P 
D)  MRP > MFC

Question 11

Increasing the demand for union-made products is likely to cause the wage of union workers to ________ and the quantity of labor employed in unionized industries to ________, all other things unchanged.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease

Question 12

A union shop is a firm that can hire and retain union as well as nonunion workers, and nonunion workers do not have to meet union requirements.

Accepted Answer

A) True 
 B)False

Question 13

Use the following to answer question(s): Supply and Marginal Factor Cost
 
-(Exhibit: Supply and Marginal Factor Cost) The MFC is:

Accepted Answer

A)  the change in total cost resulting from adding one more unit of a factor. 
B)  the change in the quantity of a factor divided by the change in total cost. 
C)  MP multiplied by the price of the output. 
D)  less than the factor price after the first unit of factor.

Question 14

To maximize profits, a perfectly competitive firm applies the marginal decision rule and thus:

Accepted Answer

A)  sells where P = AVC. 
B)  hires factors until MP = MFC. 
C)  hires a factor up to the point that the extra revenue generated by the extra output of the additional unit of the factor is equal to the extra cost of hiring the additional unit of the factor. 
D)  hires factors until MP = MC.

Question 15

Use the following to answer question(s): Wage-Employment Model in Perfectly Competitive and Monopsony Factor Markets
 
-(Exhibit: Wage-Employment Model in Perfectly Competitive and Monopsony Factor Markets) If this diagram portrayed a perfectly competitive market, the equilibrium-wage rate would be:

Accepted Answer

A)  0H. 
B)  0J. 
C)  0K. 
D)  0L.

Question 16

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 this diagram portrayed a bilateral monopoly model, the wage rate would be:

Accepted Answer

A)  0K. 
B)  0J. 
C)  0H. 
D)  indeterminate.

Question 17

Which of the following statements is true, assuming that a firm is a price taker in the labor market?

Accepted Answer

A)  The firm faces a demand curve for labor that is horizontal. 
B)  The firm faces a supply curve of labor that is horizontal. 
C)  The firm faces a supply curve of labor that is the MRP of labor. 
D)  The firm faces a demand curve for labor that is vertical.

Question 18

Use the following to answer question(s): Monopsony
 
-(Exhibit: Monopsony) Which of the following is (are) true?

Accepted Answer

A)  Given perfect competition in the factor market, the price of a factor is equal to the MFC. 
B)  Given imperfect competition in the factor market, the price of a factor is less than the MFC. 
C)  Given perfect competition in the product market, MRP = MP times the price of output, and given imperfect competition in the product market, MRP = MP times MR, which is less than MP times price. 
D)  All of the above are true.

Question 19

Use the following to answer question(s): Minimum Wage and Monopsony
 
-(Exhibit: Minimum Wage and Monopsony) In the absence of a minimum wage, the monopsony firm in the exhibit would maximize profits by hiring _______ units of labor per period, and setting the wage at _______ .

Accepted Answer

A)  L₁; $35 
B)  L₁; $20 
C)  L₂; $30 
D)  L₃; $50

Question 20

A firm that is a monopsony in its market for a factor of production:

Accepted Answer

A)  faces a horizontal supply curve of labor. 
B)  constitutes the entire market for the factor. 
C)  is a factor price taker. 
D)  can't change the quantity of the factor it hires.

Exam 14: Imperfectly Competitive Markets for Factors of Production

Use the following to answer question(s) : Labor Market -(Exhibit: Labor Market) Given competitive market demand curve D and union members supply curve S, an increase in the demand for the union-made product will result in a:

Use the following to answer question(s) : Supply and Marginal Factor Cost -(Exhibit: Supply and Marginal Factor Cost) If the supply curve implied in this exhibit is faced by a single firm, it would be a firm:

The marginal factor cost curve for a monopsonist is:

The considerable differences in the wages of minor league athletes and major league athletes since 1977 is most likely due to:

A monopsony is a market characterized by:

Use the following to answer question 63-70. Exhibit: Monopoly and Monopsony -(Exhibit: Monopoly and Monopsony) In Panel (b) , if activity is carried on at the maximizing level specified by the marginal decision rule:

Closed-shop arrangements:

A firm that has monopoly power in the supply of a factor makes choices in same manner as any other monopoly firm by selling where _ and selecting a price determined by the _ curve.

Colleges and universities in small towns generally pay part-time instructors ________ they pay full-time instructors per credit-hour.

Use the following to answer question 63-70. Exhibit: Monopoly and Monopsony -(Exhibit: Monopoly and Monopsony) In Panel (a) , if the quantity of production is carried to the right of point E:

Increasing the demand for union-made products is likely to cause the wage of union workers to and the quantity of labor employed in unionized industries to , all other things unchanged.

A union shop is a firm that can hire and retain union as well as nonunion workers, and nonunion workers do not have to meet union requirements.

Use the following to answer question(s) : Supply and Marginal Factor Cost -(Exhibit: Supply and Marginal Factor Cost) The MFC is:

To maximize profits, a perfectly competitive firm applies the marginal decision rule and thus:

Use the following to answer question(s) : Wage-Employment Model in Perfectly Competitive and Monopsony Factor Markets -(Exhibit: Wage-Employment Model in Perfectly Competitive and Monopsony Factor Markets) If this diagram portrayed a perfectly competitive market, the equilibrium-wage rate would be:

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 this diagram portrayed a bilateral monopoly model, the wage rate would be:

Which of the following statements is true, assuming that a firm is a price taker in the labor market?

Use the following to answer question(s) : Monopsony -(Exhibit: Monopsony) Which of the following is (are) true?

Use the following to answer question(s) : Minimum Wage and Monopsony -(Exhibit: Minimum Wage and Monopsony) In the absence of a minimum wage, the monopsony firm in the exhibit would maximize profits by hiring _ units of labor per period, and setting the wage at _ .

A firm that is a monopsony in its market for a factor of production:

Exam 14: Imperfectly Competitive Markets for Factors of Production

Use the following to answer question(s) : Labor Market -(Exhibit: Labor Market) Given competitive market demand curve D and union members supply curve S, an increase in the demand for the union-made product will result in a:

Use the following to answer question(s) : Supply and Marginal Factor Cost -(Exhibit: Supply and Marginal Factor Cost) If the supply curve implied in this exhibit is faced by a single firm, it would be a firm:

The marginal factor cost curve for a monopsonist is:

The considerable differences in the wages of minor league athletes and major league athletes since 1977 is most likely due to:

A monopsony is a market characterized by:

Use the following to answer question 63-70. Exhibit: Monopoly and Monopsony -(Exhibit: Monopoly and Monopsony) In Panel (b) , if activity is carried on at the maximizing level specified by the marginal decision rule:

Closed-shop arrangements:

A firm that has monopoly power in the supply of a factor makes choices in same manner as any other monopoly firm by selling where _______ and selecting a price determined by the _______ curve.

Colleges and universities in small towns generally pay part-time instructors ________ they pay full-time instructors per credit-hour.

Use the following to answer question 63-70. Exhibit: Monopoly and Monopsony -(Exhibit: Monopoly and Monopsony) In Panel (a) , if the quantity of production is carried to the right of point E:

Increasing the demand for union-made products is likely to cause the wage of union workers to ________ and the quantity of labor employed in unionized industries to ________, all other things unchanged.

A union shop is a firm that can hire and retain union as well as nonunion workers, and nonunion workers do not have to meet union requirements.

Use the following to answer question(s) : Supply and Marginal Factor Cost -(Exhibit: Supply and Marginal Factor Cost) The MFC is:

To maximize profits, a perfectly competitive firm applies the marginal decision rule and thus:

Use the following to answer question(s) : Wage-Employment Model in Perfectly Competitive and Monopsony Factor Markets -(Exhibit: Wage-Employment Model in Perfectly Competitive and Monopsony Factor Markets) If this diagram portrayed a perfectly competitive market, the equilibrium-wage rate would be:

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 this diagram portrayed a bilateral monopoly model, the wage rate would be:

Which of the following statements is true, assuming that a firm is a price taker in the labor market?

Use the following to answer question(s) : Monopsony -(Exhibit: Monopsony) Which of the following is (are) true?

Use the following to answer question(s) : Minimum Wage and Monopsony -(Exhibit: Minimum Wage and Monopsony) In the absence of a minimum wage, the monopsony firm in the exhibit would maximize profits by hiring _______ units of labor per period, and setting the wage at _______ .

A firm that is a monopsony in its market for a factor of production:

A firm that has monopoly power in the supply of a factor makes choices in same manner as any other monopoly firm by selling where _ and selecting a price determined by the _ curve.

Increasing the demand for union-made products is likely to cause the wage of union workers to and the quantity of labor employed in unionized industries to , all other things unchanged.

Use the following to answer question(s) : Minimum Wage and Monopsony -(Exhibit: Minimum Wage and Monopsony) In the absence of a minimum wage, the monopsony firm in the exhibit would maximize profits by hiring _ units of labor per period, and setting the wage at _ .