econ exam
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
other things equal, the monopsonistic employer will pay a
lower wage rate and hire fewer workers than will a purely competitive employer
when a monopolistically competitive firm is in long-run equilibrium
marginal revenue equals marginal cost and price equals average total cost
If one worker can pick $30 worth of grapes and two workers together can pick $50 worth of grapes, the:
marginal revenue product of the second worker is $20
monopolistically competitive firms
may realize either profits or losses in the short run but realize normal profits in the long run
the economic term for a firm that is the sole buyer in a market is
monopsonist
The demand curve of a monopolistically competitive producer is
more elastic than that of a pure monopolist but less elastic than that of a pure competition
the purely competitive employer of resource A will maximize the profits from A by equating the
price of A with the MRP of A
Critics of minimum-wage legislation argue that it:
reduces employment
when economists say that the demand for labor is a derived demand, they mean that it is
related to the demand for the product or service labor is producing
compensating differences in wages
reward workers differently based on differences in the desirability of jobs
a craft union attempts t increase wage rates by
shifting the labor supply curve to the left
assume that an appliance manufacturer is employing variable resources x and y in such amounts that the MRP's of the last units of X and Y employed are $100 and $60, respectively. Resource X can be hired at $50 per unit and resource Y at $20 per unit. The firm
should hire more of both X and Y
noncompeting groups of workers are the result
differences in the innate and acquired abilities of workers
the mutual interdependence that characterizes oligopoly arises because
each firm in an oligopoly depends on its own pricing strategy and that of its rivals
the marginal productivity theory of income distribution suggests that
each individual receives income based on his or her contribution to total output
the labor supply curve facing a purely competitive employer is blank, whereas the labor supply curve facing a monopsonist is blank
horizontal/ upsloping
which of the following statements concerning a monopolistically competitive industry is true
if there are short run losses firms will leave the industry and the demand curves of the remaining firms will shift to the left
marginal revenue product of labor refers to the
increase in total revenue resulting from hiring one more unit of labor
Advertising can enhance economic efficiency when it:
increases consumer awareness of substitute products
Suppose firms in a collusive oligopoly decide to establish their prices at a level that discourages new rivals from entering the industry. This is called:
limit pricing
as a general rule, oligopoly exists when the four-firm concentration ratio is
40 % or more
If a single large employer bargains with an inclusive union, the resulting labor market model can best be described as:
a bilateral market
oligopolistic industries are characterized by
a few dominant firms and substantial entry barriers.
unions might suppose a higher minimum wage because
a higher minimum wage makes less skilled workers less substitutable for union workers
in the short run, a profit-maximizing monopolistically competitive firm sets its price
above marginal cost
the economic inefficienes of monopolistic competition may be offset by the fact that
consumers have increased product variety
Unions often oppose increases in the prices of complementary inputs (for example, truck drivers may oppose increases in taxes on diesel fuel). They do this because increases in the prices of complementary inputs might:
decrease the demand for union labor through the output effect
Suppose an oligopolistic producer assumes its rivals will ignore a price increase but match a price cut. In this case the firm perceives its:
demand curve as kinked, being steeper below the going price than above
if an industrial union is formed to bargain with a monopsonistic employer, then in this labor market
employment may either increase or decrease
A simultaneous game is said to exist when
firms choose their strategies at the same time as their rivals.
the idea of efficiency wages is that
firms might get greater work effort by paying above-equilibrium wage rates.
an employer hiring in a competitive labor market should hire additional labor as long as
the MRP exceeds the wage rate
other things equal, if firms enter a monopolistically competitive industry
the demand curves facing existing firms would shift to the left
if a firm is hiring a certain type of labor user purely competitive conditions
the labor supply and marginal labor cost curves will coincide and be perfectly elastic
the relationship between the elasticity of product demand and the elasticity of demand for labor employed in its production is such that other things equal
the more elastic the demand for the product, the more elastic the demand for labor
assume the price of capital falls relative to the price of labor and, as a result, the demand for labor increases. therefore
the output effect is greater than the substitution effect
wage differentials may result from all the following except
the tendency of qualified workers to move from lower pay jobs to higher pay jobs
the kinked demand curve model of an oligopoly is useful in explaining
why oligopolistic prices might change infrequently
a monopsonists wage cost in hiring an additional worker is the
workers wage rate plus the wage increases paid to all workers already employed
