EXAM 4 ECON 202

Why would the market supply curve for labor be upward sloping?

as the wages, most workers are willing to work more hours

What is one of the major problems that four firm concentration ratios fail to take into account?

the localized market for product

Labor unions may attempt to raise wage rates by doing what?

forcing employees, under the threat of a strike, to pay above equilibrium wage rates

What is the benefit to offering commissions or royalties to workers as pay?

fringe benefits

Herfindahl Index =

100,000

A profit maximizing firm employs resources to the point where

MRP=MRC

What does mutual interdependence mean within the context of oligopolies?

Oligopolies are mutually interdependent. This means that the actions of one oligopolistic firm affect other firms in the market

What happens when two resources are complementary and there is an increase of P in one?

a decline in the price of resource

In the short run, a profit-maximizing monopolistically competitive firm sets price (P) at what? What about the long run?

above marginal cost

What does marginal revenue product measure?

amount by which the extra production of one more worker increases a firm's total revenue.

Monopolistic competition resembles pure competition in what way.

barriers to entry are neither weak or nonexistent

In the United States professional football players are paid more than professional soccer players? What would explain this differential?

consumers have a greater demand for football games than for soccer games

Know how the price elasticity of a monopolistically competitive firm's demand curve varies in relation to product differentiation and the number of firms

directly with the number of competitors, but inversely with the degree of product differentiation

What is the long run trend of real wages?

has been upaward

What have real wages in the United States done in the long run?

have increased at about the same rate as increases in output per worker

Non-price competition refers to

is where firms use strategies to increase sales and market shares that do not involve price reduction

Why do critics of minimum wage argue that is a poorly target device?

many who benefit from the minimum wage are not poor

The restaurant, legal assistance and clothing industries are each illustrations of what type of market structures?

monopolistic competition

Why are monopolistically competitive industries inefficient?

monopolistically competitive insdustries are overpopulated with firms whose plants are underutilized

In long run equilibrium, a monopolistically competitive producer achieves product efficiency, allocative efficiency, neither or both?

neither

types of market competition

perfect, monopolistic, oligopoly and monopoly

Resource pricing is important because...

resource prices are a major determinant of money incomes; resource prices allocate scarce resources among alternative uses; resource prices, along with resource productivity, are important to firms in minimizing their costs

The labor demand curve for a purely competitive seller slopes which direction?

slopes downward of diminishing marginal productivity

Understand Derived Demand for Labor to recognize it is in a multiple choice

the demand for a resource that arises from the demand for goods produced by the resource. EX: the demand for airline pilots results from the demand of air travel.

What is another name for the MRP curve for labor?

the firm's labor demand

Homogenous oligopoly exists when....

where a small number of firms are producing

Why has the productivity and real wages of workers in industrially advanced economies risen historically?

workers have been able to use larger quantities of capital equipment

Is education a form of human capital?

yes one of the most important