4.1.6.4 Monopsony

A monopsonist is a...

• Dominant buyer of labour
• Dominant seller of labour

Monopsonists are unable to influence the wages they pay

• False
• True

The supply of labour is not the same as the marginal cost of labour because monopsonist must

• pay all existing workers the same rate as the new workers
• pay additional labour costs, e.g. NI, training costs etc

What is the missing number at A?

• 90

• 120

• 210

• 70

Which is the supply (ACL)?

• B

• A

Which is the competitive labour market wage?

• B

• A

• C

Which is the monopsony wage?

• C

• B

• A

How does a monopsonist decide upon the number of workers to employ?

• MCL=MRP
• ACL=MRP

Compared to the CLM level, a monopsonist will...

• Lower wages and reduce the number of workers
• Lower wages and increase the number of workers
• Increase wages and reduce the number of workers
• Increase wages and increase the number of workers

Which can address the LMF caused by a monopsony?

• Both 1 and 2
• NMW
• Trade unions
• Neither 1 nor 2