Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
290.
The profit-maximizing level of employment by the monopsonist in the labor market shown will
be
A. A.
291.
If the labor market shown in the graph were operating under pure competition, the equilibrium
wage rate would be
A. W1, and Q1 workers would be hired.
292.
Refer to the graph. If this labor market were operating under a monopsony, the equilibrium
wage rate would be
A. W1, and Q1 workers would be hired.
17-144
293.
Refer to the graph. Comparing a monopsony against a purely competitive labor market, the
difference in the equilibrium wage rate will be
A. W0 −W1.
294. Compared to a purely competitive firm, a monopsonist will pay
A. a higher wage rate to its workers.
17-145
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D. lower wages, while hiring the same quantity of workers as the purely competitive firm.
295. Suppose the wage rate is $5, and the marginal revenue product (MRP) of the seventh
worker at a yo-yo factory is also equal to $5. The labor market was originally purely
competitive, but is then monopsonized without changing the MRP of the seventh worker. That
means
A. more workers will be hired but they will be paid lower wages.
296. Consider the case of Eastover Coal Mining Company, operating its mine in the small,
isolated town of Eastover, Kentucky. The data in the table describe the firm, where MPL =
marginal product of labor and MRCL = marginal resource cost of labor. If the firm sells its
coal in a purely competitive market for $10 per ton, how many laborers should it hire?
Number of
Laborers
MPL (Tons of
Coal)
MRCL
1
10
$20
2
7
30
3
5
55
4
4
90
5
3.5
120
D. 5
297. The profit-maximizing rule for a firm hiring both labor (L) and capital (C) under
conditions of imperfect competition is
A. MPL / PL = MPC / PC.
298. Given: MRP = marginal revenue product; MRC = marginal resource cost; W = wage rate.
A firm that sells its product in a purely competitive market, but is a monopsonist in its labor
market, would hire the quantity of labor where
A. MRP = MRC = W.
17-147
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Dif f i c u l t y :
02 Medium
Learning Objective: 17-03 Demonstrate how monopsony a market with a single employer can
reduce wages below competitive levels.
Test Bank: II
Topic:
Monopsony Model
299. If an employer has to raise the wage rate of workers in order to employ more labor, then
the marginal labor cost curve of the employer
D. is a downward-sloping curve.
300.
Units of Labor
Wage Rate
9
$14
10
15
11
18
12
20
The table shows a monopsonist's employment schedule. What is the total labor cost for 11
workers?
A. $100
17-148
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
Dif f i c u l t y :
02 Medium
Learning Objective: 17-03 Demonstrate how monopsony a market with a single employer can
reduce wages below competitive levels.
Test Bank: II
Topic:
Monopsony Model
301.
Units of Labor
Wage Rate
9
$14
10
15
11
18
12
20
The table shows a monopsonist's employment schedule. What is the firm's marginal labor cost
of hiring the 11th worker?
A. $24
302.
(1)
(2)
(3)
Number of Labor Units
MRP of Labor
Wage Rate
0
1
$21
$9
2
19
10
3
17
11
4
15
12
5
13
13
17-149
6
11
14
7
9
15
8
7
16
The table gives a monopsonist’s marginal-revenue-product schedule for labor in columns 1 and
2 and the supply schedule for labor in columns 1 and 3. What is the firm's total labor cost if it
hires 6 workers?
A. $33
303.
(1)
(2)
(3)
Number of Labor Units
MRP of Labor
Wage Rate
0
1
$21
$9
2
19
10
3
17
11
4
15
12
5
13
13
6
11
14
7
9
15
8
7
16
The table gives a monopsonist’s marginal-revenue-product schedule for labor in columns 1 and
2 and the supply schedule for labor in columns 1 and 3. What is the marginal labor cost of the
fourth worker?
304.
(1)
(2)
(3)
Number of Labor Units
MRP of Labor
Wage Rate
0
1
$21
$9
2
19
10
3
17
11
4
15
12
5
13
13
6
11
14
7
9
15
8
7
16
The table gives a monopsonist’s marginal-revenue-product schedule for labor in columns 1 and
2 and the supply schedule for labor in columns 1 and 3. For maximum profits, how many
labor-units will the monopsonist hire and what will be the wage rate paid?
A. 2 and $10
17-151
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
reduce wages below competitive levels.
Test Bank: II
Topic:
Monopsony Model
305.
(1)
(2)
(3)
Number of Labor Units
MRP of Labor
Wage Rate
0
1
$21
$9
2
19
10
3
17
11
4
15
12
5
13
13
6
11
14
7
9
15
8
7
16
The table gives a monopsonist’s marginal-revenue-product schedule for labor in columns 1 and
2 and the supply schedule for labor in columns 1 and 3. If, instead of being a monopsony, the
labor data shown in the table were for a competitive labor market, how many labor-units would
be hired and what would be the wage rate paid?
A. 3 and $11
306.
Demand and Supply Labor Data
Employment
Total Output
Product Price
Wage Rate
10
108
$1.05
$6
11
160
0.95
7
12
210
0.85
8
13
258
0.75
9
Refer to the table. What is the marginal resource cost if the firm employs a 12th worker?
A. $16
307.
Demand and Supply Labor Data
Employment
Total Output
Product Price
Wage Rate
10
108
$1.05
$6
11
160
0.95
7
12
210
0.85
8
13
258
0.75
9
Refer to the table. What is the marginal revenue product if the firm employs the 12th worker?
A. $19.50
17-153
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Dif f i c u l t y :
02 Medium
Learning Objective: 17-03 Demonstrate how monopsony a market with a single employer can
reduce wages below competitive levels.
Test Bank: II
Topic:
Monopsony Model
308.
Demand and Supply Labor Data
Employment
Total Output
Product Price
Wage Rate
10
108
$1.05
$6
11
160
0.95
7
12
210
0.85
8
13
258
0.75
9
Refer to the table. How many units of labor will this firm hire to maximize its profits?
309.
Demand and Supply Labor Data
Employment
Total Output
Product Price
Wage Rate
10
108
$1.05
$6
11
160
0.95
7
12
210
0.85
8
13
258
0.75
9
Refer to the table. What is the market structure in the firm's product and labor markets?
A. purely competitive in both the product market and the labor market
310. When workers unionize, they
A. compete with one another in selling their services.
311. Models that analyze how labor unions attempt to raise wage rates include the following,
except the
A. demand-enhancement model.
17-155
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 17-04 Discuss how unions increase wage rates by pursuing the demand-
enhancement model, the craft union model, or the industrial union model.
Test Bank: II
Topic:
Three Union Models
312. An industrial union
A. is most concerned with increasing the demand for workers in an industry.
313. Craft unions have typically been most effective in raising wage rates by
A. legislating a minimum wage rate above the competitive equilibrium level.
314. Craft unions tend to do all of the following except
A. adopting restrictive membership policies.
17-156
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y :
Keyboard Navigation
Blooms: Understand
Dif f i c u l t y :
02 Medium
Learning Objective: 17-04 Discuss how unions increase wage rates by pursuing the demand-
enhancement model, the craft union model, or the industrial union model.
Test Bank: II
Topic:
Three Union Models
315. The American Medical Association, a physicians' union, is a good example of a(n)
A. demand-enhancing union.
316. The best example of an industrial union is the
A. United Association of Plumbers and Pipefitters.
317. Strict occupational licensing requirements are favored by a(n)
A. demand-enhancing union.
17-157
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
B. craft union.
C. inclusive union.
D. industrial union.
318. Suppose a powerful labor union negotiates a wage for its members above the equilibrium
wage rate in a nonunionized market. A likely result of this is that
A. the union will have difficulty recruiting new members.
319. A decrease in the supply curve of nurses could be accounted for by all of the following
except a(n)
A. increase in the rewards available in other comparable occupations.
17-158
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Test Bank: II
Topic:
Three Union Models
320. The wages of plumbers are likely to increase when
D. more do-it-yourself home improvement centers open across the nation.
321.
Refer to the graphs. If union workers decide to take more leisure, while the prices of the
products produced by union workers increase, this situation is depicted in graph
C. C.
D. D.
322.
Refer to the graphs. The formation of an exclusive or craft union, with no change in demand, is
depicted by situation
A. A.
323.
Refer to the graphs. If union workers decide to take more leisure, while the prices of the
products produced by union workers decrease, this situation is depicted in graph
A. A.
324. An industry would be likely to lay off workers following
A. an increase in the price of the firm's product.
