MC MC, VMP, S= AC W, Wa VMP N. N, Which depicts the situation of a monopsonistic firm. A minimum wage of W 1 is imposed by the government on this firm. The equilibrium employment level is: the same as it would be if the labour market were perfectly competitive N 1, which is greater than the level of employment that would prevail if the firm were a monopsonist No at the intersection of the minimum wage W 1 and the marginal cost of labour curve

MC MC, VMP, S= AC W, Wa VMP N. N, Which depicts the situation of a monopsonistic firm. A minimum wage of W 1 is imposed by the government on this firm. The equilibrium employment level is: the same as it would be if the labour market were perfectly competitive N 1, which is greater than the level of employment that would prevail if the firm were a monopsonist No at the intersection of the minimum wage W 1 and the marginal cost of labour curve

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter14: Labor Markets And Income

Section: Chapter Questions

Problem 8SCQ: Table 14.13 shows information from the supply curve for labor for a monopsonist, that is, the wage...

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Table 14.13 shows information from the supply curve for labor for a monopsonist, that is, the wage rate required at each level of employment. What is the monopsonists marginal cost of labor at each level of employment? If each unit of labors marginal revenue product is 13, what is the firms profit maximizing level of employment and wage?
Other than the demand for labor, what would be another example of a 'derived demand?
Table 14.11 shows levels of employment (Labor), the marginal product at each of those levels, and a monopolys marginal revenue. What is the monopolys marginal revenue product at each level of employment? If the monopoly operates in a perfectly competitive labor market where the going market wage is 20, what is the films profit maximizing level of employment?
The monopsony's labor supply is w= 200 +4L. Which of the following is the firm's marginal expenditure equation? OA. ME=100+6L OB. ME=200+ BL e ⒸC. ME=800+8-L OD. ME=400+24L As Re Ni Assuming the demand for labor is w=400-4L, the monopsony wage will be places). St M than the competitive market wage by $ (round your answer to two decimal higher lower
3 ped Wage Rate W We W 0 Qe Quantity of Labor Multiple Choice Refer to the graph. A monopsonist will set the wage at MRC Wu a rate that cannot be determined from the graph. Wm D₁ = MRP We
Consider a manufacturing firm in a labor market that isperfectly competitive. There are two kinds of workers: productiveworkers whose marginal revenue product is $48,000 per year, andlazy workers whose marginal revenue product is $40,000 per year. Itis difficult for the firm to differentiate between productive andlazy workers. A local college offers a new yearlong astronomy course. Althoughthe cost of tuition is the same for both types of workers, thepsychic cost of having to work hard and get a passing grade islower for productive workers because they are able to learn morequickly than lazy workers. Therefore, the cost of taking the class(including the cost of tuition as well as the psychic cost) is$5,000 per year for a productive worker and $10,000 per year for alazy worker. Because astronomy has little relevance tomanufacturing, taking the class does not increase or decrease aworker's productivity. The firm uses the class as a way to differentiate betweenproductive and lazy…
$ MC of Labor P1 Labor Supply P2 P3 P4 VMPL/ Nabor Demand Quantity Labor The information above is from the labor supply and production function for a firm that operates as a monopsony employer. What wage would this firm charge to maximize profit? O P2 P4 О РЗ O P1
Suppose the market supply is given by L=2.8w. Assume the product market is competitive and the product price is p=$12. Also suppose MPL=8.6-0.8L and that the firm has monopsony power. A.Graph the marginal revenue product of labour. The slope of this curve is equal to The vertical intercept of this curve is equal to .Write the formula for the inverse supply of labour and graph the supply curve. The slope of this supply curve is B. For this firm, the fully simplified formula for marginal cost is MC₁ = __ L (Enter the value which completes the formula. Do not enter the variable, it has been given) Illustrate this market graphically, including accurate numbers for slopes and intercepts. Write the condition which the monopsonist's optimal choice of labour must satisfy. This monopsonist will choose employment level . At this employment level, the firm will offer the wage $ , and the value marginal product of labour is $ The average cost of labour for this monopsonist is $ and the firm's…
The diagram provides supply and demand curves for a competitive labour market it a labour union negobates the wage to W, in an otherwise competitive labour market OA employers will hire L, labour OB. employers will here labour at the level higher than L OC. the supply of labour will stay the same OD equilibrium will occur at W, and L OE the demand for labour will stay the same 0 Wage Rate W₁ Quarnty of Labour Supply Demand
A firm faces a perfectly elastic demand for its output at a price of $6 per unit of output. The firm, however, faces an upward-sloped labor supply curve ofE = 20w - 120where E is the number of workers hired each hour and w is the hourly wage rate. Thus, the firm faces an upward-sloped marginal cost of labor curve ofMCE = 6 + 0.1EEach hour of labor produces five units of output. How many workers should the firm hire each hour to maximize profits? What wage will the firm pay? What are the firm’s hourly profits?
Firm MFC $20 18 Supply Labor 16 14 12 10 MRP = Demand 8. 0 1 2 3 Workers 4 per day The graph above displays a monopsony in the labor market. Use the graph to answer the following questions: A. Assume the monopsonist is profit-maximizing. The monopsonist should set the wage to [Select] to reach the goal of hiring [ Select ] workers. MAY Dollars per
Suppose that the supply and marginal revenue product of labour curves faced by a monopsonist are as follows: Supply with Min Wage MC Units of Labour (N) Supply MRPN MC with Min Wage 1 5.00 8.00 2 5.20 7.50 5.45 7.00 5.70 6.45 5 6.00 6.05 6. 6.30 6.65 5.50 7 4.90 7.00 4.00 a) Maintain the assumption that firms can not price discriminate in the input market and fill in the firm's Marginal Cost (MC) table. b) How many workers will the monoposonist hire and what would the wage be? How many workers would have been hired and at what wage if this were a perfectly competitive market? c) Suppose now the province introduces a new minimum wage policy which sets the minimum wage at $6. Fill in the monopsonist's supply and marginal cost tables with the minimum wage. d) What will happen to the number of workers hired with the introduction of this minimum wage?