Chapter 15

Refer to the above data. If there is neither a union nor a minimum wage, we can conclude that this firm:

"purchases" labor in purely competitive labor market.

The individual firm in a purely competitive labor market faces:

a perfectly elastic labor supply curve and a downsloping labor demand curve.

In a monopsonistic labor market the employer will maximize profits by employing workers up to that point at which:

marginal revenue product equals marginal resource (labor) cost.

As compared to a purely competitive labor market, in a nonunionized monopsonistic labor market wages:

and employment will both be lower.

Refer to the above data. If the market wage rate is $8, this firm will employ:

4 workers.

Occupational licensing has much the same effect as:

exclusive unionism.

The critical feature of a monopsonistic labor market is that the employer:

faces an upsloping labor supply curve.

Labor unions may attempt to raise wage rates by:

forcing employers, under the threat of a strike, to pay above-equilibrium wage rates.

Refer to the above diagrams. The firm:

has a constant marginal resource cost of $5.

Refer to the above data. If this firm can hire as few or many workers as it wants at $8, it is:

hiring labor in a purely competitive labor market.

The labor supply curve facing a purely competitive employer is __________ whereas the labor supply curve facing a monopsonist is _________.

horizontal; upsloping

In monopsony:

the wage rate paid by the employer varies directly with the number of workers employed.

A firm can hire six workers at a wage rate of $8 per hour but must pay $9 per hour to all of its employees to attract a seventh worker. The marginal wage cost of the seventh worker is:

$15.

Refer to the above data. At the profit maximizing level of employment, this firm's total revenue will be:

$30.

Which of the following is not correct?

A monopsonistic employer will pay workers a wage rate equal to their MRP.

Refer to the above diagram. Assume that an inclusive union is formed to bargain with the monopsonistic employer of the previous question. To what level can this union increase the wage rate without causing the number of jobs to decline below that which the monopsonist would otherwise have provided?

C

The long-run trend of real wages:

Has been downward because the price level has risen faster than normal wages

Which of the following tactics is most associated with the demand-enhancement union model?

Lobbying for increases in public expenditures on the product it is producing.

If a firm faces an upsloping labor supply curve (and there is no union or minimum wage), its:

MRC curve is also upsloping.

If a firm is hiring variable resources D and F in imperfectly competitive input markets, it will maximize profits by employing D and F in such quantifies that:

MRPD/MRCD = MRPF/MRCF = 1.

Refer to the above diagram. Assuming no union or relevant minimum wage, the firm represented will hire:

Q2 workers and pay a W1 wage rate.

Minimum-wage legislation is less likely to have adverse effects on employment when the:

affected labor market is monopsonistic.

The real wage will rise if the nominal wage:

increases more rapidly than the general price level.

Inclusive unionism is practiced mostly by:

industrial unions.

Refer to the above diagrams. The profit-maximizing firm's total wage cost:

is 0Wbc.

Refer to the above diagrams. The profit-maximizing firm's total revenue:

is 0abc.

A monopsonistic employer's marginal resource (labor) cost curve:

lies above the labor supply curve because the higher wage paid to an additional worker must also be paid to all other employed workers.

Other things equal, the monopsonistic employer will pay a:

lower wage rate and hire fewer workers than will a purely competitive employer.

A monopsonistic employer in an unorganized (nonunion) labor market will:

pay a wage rate less than labor's MRP.

"Player drafts" of professional athletes:

promote monopsony in the hire of professional athletes.

If a firm is hiring a certain type of labor under purely competitive conditions:

the labor supply and marginal labor (resource) cost curves will coincide and be perfectly elastic.