18) You can tell a firm has monopsony power in the labor market if (2pts) its MF
ID: 2440174 • Letter: 1
Question
18)
You can tell a firm has monopsony power in the labor market if
(2pts)
its MFC curve is upward-sloping.
its MFC curve is a horizontal line.
its VMP curve lies above its MRP curve.
its MRP curve is downward-sloping.
it can hire as many workers as it wants at a constant wage.
19)
According to the analysis in the textbook, if a labor union is bargaining with a monopsonist
(2pts)
it will never succeed in raising the union wage.
it will be more successful than if it is bargaining with a monopolist.
for at least some possible wages, there is no wage-employment trade-off.
it is the VMP curve that should be used, not the MRP curve, when figuring the likely outcome.
20)
According to the textbook, which of the following statement about the effects of unions is true?
(2pts)
In a competitive environment, any success of a union in raising the wages of its members must come at the expense of long-run profits.
Evidence clearly shows that unions have succeeded in raising the share of labor in total national income.
There are both theoretical and empirical reasons for believing that labor unions increase the wages of union employees but decrease the wages of nonunion employees.
All the above.
None of the above.
21)
Which of the following is an example of a market failure?
(2pts)
Pollution from coal-fired power plants in the Midwest causes acid rain in the northeastern U. S.
Jim chooses not to pay for a flu shot even though it would reduce the chances that other people will get the flu.
A monopoly produces the level of output for which MR = MC, but at this point P > MC.
All of the above
None of the above
Explanation / Answer
18. its VMP curve lies above its MRP curve.( Since p>marginal revenue hence VMP is greater than MRP which shows monospony power )
19. it is the VMP curve that should be used, not the MRP curve, when figuring the likely outcome.( Exploitation occurs because monosoponist pays labour according to it's MRP and not VMP)
20. All of above
21. All of above( Market failure is a special case where fails to efficiently provide the good )
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