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
