Question 1

Suppose the demand faced by a labor monopsony is W = 40,000 - 100l, where W is the annual wage and L is the number of workers hired. The labor supply is given by W = 10,000 + 100l.
a. Derive the marginal expenditure equation.
b. Determine the wage the monopsonist would pay and how many workers it would hire.

Accepted Answer

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Question 2

A pizza shop's marginal product of labor, measured as the number of pizzas delivered per week, is MP_l = 55 - 5L, where L is the number of workers. The current average price of a pizza in this highly competitive market is $10. The shop, a monopsonist, faces labor supply of W = 100 + 40l, where W is the wage per week and L is the number of workers. a. How many workers will the pizza shop hire when the price of pizza is $10? b. An influx of college students coming back from vacation raises the market price of a pizza to $15. How many workers will the pizza shop hire when the price of pizza is $15?

Accepted Answer

The answer of A pizza shop's marginal product of labor,...

Question 3

At many colleges and universities, adjunct (part-time) faculty do not belong to a union. Explain what would happen to faculty wages and employment at a university if the adjunct faculties successfully unionized.

Accepted Answer

The answer of At many colleges and universities, adjunct (part-time)...

Question 4

Explain how the following would affect the equilibrium wage and quantity of labor in the labor market.
a. A decrease in the price of the output made by labor
b. An increase in legal immigration
c. An increase in the amount of capital used by firms

Accepted Answer

The answer of Explain how the following would affect the...

Question 5

Use the following to answer question: Figure 13.9 -(Figure 13.9) a. Determine the MRP_L, l^S_, and ME equations. b. Calculate and then illustrate the equilibrium outcome for the monopsonist. c. Calculate and then illustrate the equilibrium outcome if the employer were a perfect competitor. d. Complete the following table:

Accepted Answer

The answer of Use the following to answer question:
Figure 13.9...

Question 6

Explain how a union is similar to a cartel.

Accepted Answer

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Question 7

Use the following to answer question:
Table 13.3 
-(Table 13.3) Explain why a monopsony faces a marginal expenditure curve that lies above the supply curve. Each worker is named, for a total of four workers. All dollar values are given as dollars per hour.

Accepted Answer

The answer of Use the following to answer question:
Table 13.3...

Question 8

A union faces a labor demand curve given by MRP_L= 100 - 5L. If the union wishes to maximize the total wages of its membership, how many members will be employed and what will be the average wage?

Accepted Answer

The answer of A union faces a labor demand curve...

Question 9

Assume that the initial short-run labor demand curve is given by MRP_L₁ = 800 - 50l, where l is the quantity of labor demanded. The market wage rate is $200 per week. Graphically explain why long-run labor demand is flatter than short-run labor demand.

Accepted Answer

The answer of Assume that the initial short-run labor demand...

Question 10

Use the following to answer question:
Figure 13.10 
-(Figure 13.10) Explain and graphically illustrate how the passage of a minimum wage would affect this market.

Accepted Answer

The answer of Use the following to answer question:
Figure 13.10...

Quiz 13: Factor Markets

At many colleges and universities, adjunct (part-time) faculty do not belong to a union. Explain what would happen to faculty wages and employment at a university if the adjunct faculties successfully unionized.

Explain how the following would affect the equilibrium wage and quantity of labor in the labor market. a. A decrease in the price of the output made by labor b. An increase in legal immigration c. An increase in the amount of capital used by firms

Explain how a union is similar to a cartel.

Use the following to answer question: Table 13.3 -(Table 13.3) Explain why a monopsony faces a marginal expenditure curve that lies above the supply curve. Each worker is named, for a total of four workers. All dollar values are given as dollars per hour.

A union faces a labor demand curve given by MRPL = 100 - 5L. If the union wishes to maximize the total wages of its membership, how many members will be employed and what will be the average wage?

Assume that the initial short-run labor demand curve is given by MRPL1 = 800 - 50l, where l is the quantity of labor demanded. The market wage rate is $200 per week. Graphically explain why long-run labor demand is flatter than short-run labor demand.

Use the following to answer question: Figure 13.10 -(Figure 13.10) Explain and graphically illustrate how the passage of a minimum wage would affect this market.

A union faces a labor demand curve given by MRP_L= 100 - 5L. If the union wishes to maximize the total wages of its membership, how many members will be employed and what will be the average wage?

Assume that the initial short-run labor demand curve is given by MRP_L₁ = 800 - 50l, where l is the quantity of labor demanded. The market wage rate is $200 per week. Graphically explain why long-run labor demand is flatter than short-run labor demand.