1. In a perfectly competitive factor market, the supply of factor to an individu
ID: 1186664 • Letter: 1
Question
1.
In a perfectly competitive factor market, the supply of factor to an individual firm is:
A) vertical.
B) horizontal.
C) upward sloping.
D) downward sloping.
2.
A market in which there is a single buyer of a good, service, or factor of production is a(n):
A) duopoly.
B) oligopoly.
C) monopoly.
D) monopsony.
3.
The wage paid by a firm buying labor in a monopsonistic market:
A) is greater than the wage in the situation where the monopsony firm was broken up into a large number of firms buying inputs in a perfectly competitive factor market.
B) is less than the wage in the situation where the monopsony firm was broken up into a large number of firms buying inputs in a perfectly competitive factor market.
C) decreases with the quantity of labor hired.
D) does not change with the quantity of labor hired.
4.
Monopoly implies a single _______ and monopsony implies a single _______ .
A) buyer; seller
B) firm; industry
C) industry; firm
D) seller; buyer
5.
A bilateral monopoly is a market structure characterized by:
A) one seller and one buyer.
B) one seller and many buyers.
C) one buyer and many sellers.
D) two buyers and many sellers.
Explanation / Answer
1. Option b.
Supply of factor to the individual firm is perfectly elastic and it is denoted by a horizontal line.
2. Option d.
In a market structure when there is only a single buyer in a market it is called a monopsony.
3. Option b.
The wage paid by a firm buying labor in a monopolistic market is less than the wage in the situation where the monopsony firm was broken up into a large number of firms buying inputs in a perfectly competitive factor market.
4. Option D
Monopoly implies a single seller and monopsony implies a single buyer.
5. Option a.
A bilateral monopoly is a market structure characterized by one seller and one buyer.
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