Question : 41) For a monopsonist in a labour market, the firm’s : 1384288

41) For a monopsonist in a labour market, the firm’s MC curve for labour lies ________ the competitive supply curve for labour; just as the marginal revenue curve for a monopolist lies ________ the demand curve for its product.

A) below; below

B) below; above

C) above; above

D) above; below

42) For a monopsonist that faces an upward-sloping labour supply curve, the marginal cost of labour curve will be ________ the supply curve because ________.

A) below; the increased wage necessary to attract an extra worker is paid to that worker alone

B) above; the increased wage necessary to attract an extra worker must be paid to everyone already employed

C) above; the average wage exceeds the marginal wage when the average wage is rising

D) the same as; the marginal cost of labour equals the average cost of labour

E) below; the extra labour supplied is less capable than previous units of labour supplied

43) A profit-maximizing monopsonist in a labour market will continue to hire labour until the

A) hourly wage of the labour is equated with its marginal cost.

B) hourly wage of the labour is equated with its average cost.

C) marginal revenue product of labour equals its marginal cost.

D) marginal cost of labour equals its average revenue.

E) marginal product of labour is maximized.

44) Suppose your firm is a monopsonist hiring only one variable input. If you want to maximize profits, you will purchase that variable input up to the point where the

A) demand curve intersects the supply curve of the input.

B) MRP curve for the input intersects the marginal cost curve for the input.

C) wage rate is the highest.

D) marginal product of that input equals the price of one unit of the input.

E) cost of the input equals the profit generated by the employment of that input.

45) If we compare the wage rate and the level of employment achieved in a competitive labour market with those in a monopsonistic labour market, the latter will generate

A) a lower level of employment and a higher wage rate.

B) a higher level of employment and a lower wage.

C) a higher level of employment and a higher wage rate.

D) a lower level of employment and a lower wage.

E) the same outcomes as in a competitive labour market.

46) Consider a monopsonistic labour market. Ten units of labour will be supplied if the wage rate is $12, and 11 units of labour will be supplied if the wage rate is $14. The marginal cost of the eleventh worker is

A) $2.

B) $12.

C) between $12 and $14.

D) $14.

E) more than $14.

47) Consider a monopsonistic labour market. One hundred units of labour will be supplied if the wage rate is $12, and 101 units of labour will be supplied if the wage rate is $14. The marginal cost of the 101st worker is

A) $14.

B) $140.

C) $214.

D) $1414.

E) Not enough information to know.

48) Consider a small, remote town with only one employer – a gold mining company.  Suppose the current work force is 875 workers, each of whom is paid $6000 per month.  In order to attract one additional worker, the employer must increase the wage to $6025 per month.  The marginal cost of this additional worker is

A) $21 875 per month.

B) $21 900 per month.

C) $27 900 per month.

D) $5.25 million per month.

E) $5.28 million per month.

49) Suppose that a regional health authority is the only employer of nurses, and further, suppose that nurses are not unionized. The 625 currently employed nurses are paid $27 per hour. To attract an additional nurse, the employer must increase the wage to $28 per hour. The marginal cost of this additional worker is

A) $653

B) $28

C) $17 500

D) $17 528

E) $27

50) Suppose we have a labour market with a monopsony employer in a town. Now suppose that all workers form a union and negotiate a wage that is equivalent to what the wage would have been in a competitive market. What is the profit-maximizing condition for the firm?

A) Hire the number of workers such that the MC of the final worker hired equals the union-set wage.

B) Hire the number of workers such that the MRP of the final worker hired equals the union-set wage.

C) Hire the number of workers such that the MRP of the final worker equals the monopsony equilibrium wage.

D) Hire the number of workers such that the MR of the firm’s product equals the MC of the final worker hired.

E) Hire the number of workers such that the MR of the firm’s product equals the MRP of the final worker hired.