Compared to perfect competition, a monopsony hires ______ workers and pays a ___

Question

Compared to perfect competition, a monopsony hires ______ workers and pays a _______ wage.

(2pts)

more . . . lower

more . . . higher

fewer . . . lower

fewer . . . higher

8)

Studies by economists suggest that unions have been successful at

(2pts)

increasing the percentage of the labor force that is unionized.

increasing the earnings of workers who are not members of unions.

increasing the earnings of union labor, but decreasing the earnings of nonunion labor.

increasing the share of national income going to labor (union and nonunion, combined).

9)

The "new view" of labor unions is that they

(2pts)

increase productivity by providing a collective voice for workers.

cause inflation.

have negative effects on productivity due to practices such as featherbedding.

have negative effects on the efficiency of unionized firms.

10)

As the elasticity of demand for labor increases, the more likely a labor union will be to:

(2pts)

try to increase wages by reducing the supply of labor.

try to protect and maintain the current level of employment among its members and place less emphasis on increasing wages.

place its support behind the right-to-work laws.

require longer and longer apprenticeship and training programs in order to supply highly skilled workers.

Explanation / Answer

7)

In order to maximize its profits, monopsony tends to hire few workers and pay them lower wage.

Hence right answer is : Fewer: Lower .

8)

Various studies carried out by economists suggest that labor union restricts job opportunities and tend to retard the economic recovery from recession.

Wages of workers rise,

Hence right answer is : increasing the share of national income going to labor (union and nonunion, combined).

9)

Right answer is : increase productivity by providing a collective voice for workers.

Unions claims that by fighting for rights of workers, they tend to increase productivities of workers.

10)

Right answer is : try to protect and maintain the current level of employment among its members and place less emphasis on increasing wages.

Increase in elasticity of demand for labor implies that, there might be some other alternate to labor force. Hence, it reduces bargaining power of labor unions. They can not fight for higher wages and perks.

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