\"Please answer with simple explainations\"\"Please answer with simple explainat
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15. Other things being equal, if a once- competitive firm attains a high degree of monopoly power, its resource demand curve will:
A) become perfectly inelastic.
B) remain perfectly elastic.
C) become more elastic
D) become more inelastic
16. Assume that a purely competitive firm uses two resources, labor (L) and capital (C), to produce a product. In which situation would the form be maximizing profit?
MRP(L)
MRP(C)
P(L)
P(C)
a)
$100
$200
$300
$400
B)
$100
$200
$200
$100
C)
$150
$200
$150
$200
D)
$300
$400
$300
$200
17. A cost-minimizing firm using two outputs, x and y, will employ inputs so that:
A) MPx=MPy
B) Px/MPy=Py/MPx
C) MPx/Px=MPy/Py
D) Px=Py
18. Those who advocate the marginal productivity theory of income distribution argue that:
A) government policy should be used to redistribute income based on need.
B) family income should be based on a family's demand for products.
C) resource markets will set incomes based on workers contributions to the output of scarce goods and services.'
D) monopoly and monophony power do not affect resources payments of the overall distribution of income.
19. Which statement is correct?
A) The percentage change in the nominal wage plus the percentage change in the price level equals the percentage change in the real wage.
B) the percentage change in the real wage minus the percentage change in the price level equals the percentage change in the nominal wage.
C) the percentage change in the price level minus the percentage change in the nominal wage equals the percentage change in the real wage.
D) the percentage change in the nominal wage minus the percentage change in the price level equals the percentage change in the real wage.
20. A firm in a purely competitive product market finds it must increase wages to attract extra workers. The firm will hire labor up to the point where the marginal:
A) product of labor equals the wage rate.
B) revenue product of labor equals the wage rate.
C) revenue product of labor starts to decline.
D) revenue product equals the cost of hiring an extra worker.
21. Given the following table for a competitive firm which is maximizing profits, if the marginal revenue product of the last worker hired is $150 and three workers are employed per day, the price of a unit of output must be:
Number of workers employed per day: | Total firm output per day
1 | 0
2 | 5
3 | 20
5 | 38
A) $1000
B) $100
C) $20
D) $10
Use the following to answer question 22:
22. The level of employment in the labor market shown above will be :
A)A B)B C)C D)D
Use the following to answer questions 23- 24
23. Refer to the about graph. Now suppose that through an employers' association firms in this industry establish a monopsony in the hiring of labor. in this case the wage rate will be :
A) W1 and Q1 workers will be hired.
B) W2 and Q2 workers will be hired
C)W2and Q1 workers will be hired
D)W3 and Q1 workers will be hired
24. Refer to the about graph. Now assume that workers react to the formation of this monopsony by establishing an inclusive union. To what level can this union increase the wage rate without causing the number of the jobs to decline below that which the monopsony would otherwise provide ?
A) W0 B)W1 C)W2 D)W3
25. The profit-maximizing rule for a firm hiring both labor (L) and capital (C) under conditions of imperfect competition is :
A) MP L/ MRC L= MP C/MRC C
B)MP L/ MP C = MRC c / MRP L
C) MRP L/ MRC L= MEP c / MRC c = 1
D MRC L/ MP L = MRC C/ MPc = 1
Use the following to answer question 26
26) If a minimum wage is set a W, what will happen to employment in the monopsonistic labor market shown in the diagram above?
A) Employment will be decrease
B) Employment will be increase
C) Employment will stay the same
D)Employment may increase but usually it tends to stay the same
Use the following to answer question 27:
27. Senator Approxmire opposes a proposal requiring that the monopsonist pay a minimum wage of at least w min, stating: " Even if the labor market is monopsonistic, economic theory unambiguously demonstrates that imposing a minimum wage causes emplayment to fall." Senator Approxmire is :
a) correct because the law of demand states that as the wage rises, the firm demands less labor.
b) incorrect because the monopsonist would offer a wage of wa, which is higher than w min, and maintain its employment at L1
c) incorrect because the monopsonist's effective MRC curve becomes ABCD, which means that it will choose to hire more workers, from L1 to L2, following the impostion of the minimum wage.
d) correct because the graph indicates that at the wage of Wmin, the monopsonist would not make a profit from hiring labor and so would not hire ant at all.
28. Shirking can be considered to be a principal-agent problem because:
a) firms often operate in a monopsonistic labor market.
b) firms pay seniority wages to workers in a labor market.
c) the work objectives of the agents diverge from the profit objectives of the principal.
d) the principal firm in an industry does most of the major collective bargaining for other agents in the industry.
29. If the payment to an input is a pure economic rent, then reducing that payment will:
a) decrease the demand for the input.
b) increase the quantity supplied of the input.
c) decrease the quantity supplied of the input.
d) not influence the availability of the point.
MRP(L)
MRP(C)
P(L)
P(C)
a)
$100
$200
$300
$400
B)
$100
$200
$200
$100
C)
$150
$200
$150
$200
D)
$300
$400
$300
$200
Explanation / Answer
15.
C) become more elastic
16.
D)
$300
$400
$300
$200
17.
D) Px=Py
18.
A) government policy should be used to redistribute income based on need.
19.
D) the percentage change in the nominal wage minus the percentage change in the price level equals the percentage change in the real wage.
20.
B) revenue product of labor equals the wage rate.
21.
C) $20
Use the following to answer question 22:
22. D)D
Use the following to answer questions 23- 24
23.
B) W2 and Q2 workers will be hired
24. B)W1
25.
C) MRP L/ MRC L= MEP c / MRC c = 1
Use the following to answer question 26
26)
D)Employment may increase but usually it tends to stay the same
Use the following to answer question 27:
27.
b) incorrect because the monopsonist would offer a wage of wa, which is higher than w min, and maintain its employment at L1
28.
d) the principal firm in an industry does most of the major collective bargaining for other agents in the industry.
29.
c) decrease the quantity supplied of the input.
D)
$300
$400
$300
$200
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