Multiple Choice: What is an explanation of why employers may have more monopsony
ID: 1155250 • Letter: M
Question
Multiple Choice: What is an explanation of why employers may have more monopsony power over woman than men?
A) women (who adopt traditional gender roles) are more likely than men to seek employment closer to home
B) if the couple is a two-career couple in the same field, they face higher search costs when looking to acquire jobs in the same location
C) women have higher employment search costs than men in the face of discrimination
D) competitive labor markets only exist in theory
E) Both A and C are correct
Explanation / Answer
Monopsony is a market where there is one buyer and many sellers. In this case, the men and women selling their labor services are the sellers and the employer who buys their services in return for a salary/wage is the monopsonist buyer.
Women’s job choices are much narrowed down than men’s who have taken up gender roles. Because women hunt for jobs closer to home so that they can look after their family as well takes away their liberty to freely move to high-paying jobs far away.
Moreover, due to such narrowed down choices, women are prone to expending much larger search costs than men and devote much higher time, energy and even money in looking for job opportunities.
These give the monopsonist a chance to take advantage of the behaviour of women towards their jobs and offer them much lower wages. This discrimination is based not on the type of competition in the market but on the behaviour of people looking for jobs. Thus, the correct option is:
Option E) Both A and C are correct
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