Walmart is vilified by many people as being evil, destroying jobs and cities. Ot
ID: 1180235 • Letter: W
Question
Walmart is vilified by many people as being evil, destroying jobs and cities. Others note that it has the lowest prices and is the largest employer in the country. What is the difference? Is Walmart a monopsonist?Demonstrate how a minimum wage affects the unskilled labor market. Is the labor market perfectly competitive? Can you find any examples of monopsonistic hiring? What would a minimum wage do in a monopsonistic market?
Suppose the price elasticity of demand for stocks is 1.5. This means that for every 10 percent increase in stock prices, the quantity demanded will decline by 15 percent. Does this price elasticity make sense? Explain.
What led to the rise in housing prices after 2001? Was this a housing bubble? If so, what event(s) popped the bubble?
Walmart is vilified by many people as being evil, destroying jobs and cities. Others note that it has the lowest prices and is the largest employer in the country. What is the difference? Is Walmart a monopsonist?
Demonstrate how a minimum wage affects the unskilled labor market. Is the labor market perfectly competitive? Can you find any examples of monopsonistic hiring? What would a minimum wage do in a monopsonistic market?
Suppose the price elasticity of demand for stocks is 1.5. This means that for every 10 percent increase in stock prices, the quantity demanded will decline by 15 percent. Does this price elasticity make sense? Explain.
What led to the rise in housing prices after 2001? Was this a housing bubble? If so, what event(s) popped the bubble?
Explanation / Answer
Demonstrate how a minimum wage affects the unskilled labor market. Is the labor market perfectly competitive? Can you find any examples of monopsonistic hiring? What would a minimum wage do in a monopsonistic market?
. In a market where there is no minimum wage, everyone who has even some marginal productivity would be able to be hired. The imposition of a minimum wage means that people whose marginal productivity is below that of the minimum wage will not be hired. This means that unskilled workers are not able to get jobs under the minimum wage. An example of monopsonistic hiring would be a single factory in a town that is far away from other towns and cities. In this market, people with marginal productivity below the minimum wage would not be able to find a job, even if the factory could use their labor
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