Monopsony

What is the quantity of labor a monopsony firm would hire, and what is the wage it will pay?

• q_L1 , w_u

• q_L1 , w_x

• q_L2 , w_t

• q_L2 , w_y

• q_L2 , w_x

What is the marginal factor cost of the fifth worker?

• $70

• $10

• $250

• $90

• $50

Which of the following best describes a monopsony market?

• many buyers, many sellers

• many buyers, a few sellers

• a few buyers, many sellers

• one buyer, many sellers

• many buyers, one seller

A single large hospital system hires all nurses in a city. Assume that this is a for-profit hospital system.

Which of the following can we predict about this market?

• The marginal factor cost of labor is less than the supply of labor.

• More nurses will be hired than in a competitive labor market.

• The quantity of labor hired will be allocatively efficient.

• Nurses are paid less than they would be paid in a competitive labor market.

• The hospital system will hire the quantity of labor where the supply of labor equals the marginal revenue product of labor.

What is the competitive market wage and what is the monopsony wage?

• Competitive market wage: w_c , Monopsony wage: w_e

• Competitive market wage: w_d , Monopsony wage: w_c

• Competitive market wage: w_d , Monopsony wage: w_b

• Competitive market wage: w_d , Monopsony wage: w_e

• Competitive market wage: w_c , Monopsony wage: w_b

The market supply of college instructors is given here. What is the marginal factor cost of the second instructor?

• $90,000

• $70,000

• $50,000

• $10,000

• $120,000

A monopsony market is one in which:

• there is one seller and many buyers.

• there are many buyers and many sellers.

• there is one buyer and many sellers.

• there are few buyers and a few sellers.

• there are a few sellers and many buyers

Which of the following statements is true about a monopsony labor market?

• The marginal factor cost of labor is greater than the wage rate

• There is one seller and many buyers.

• The firm can set wages at whatever price they want.

• There are no profits.

• The profit maximizing choice of labor will be at the intersection of labor supply and labor demand.

What area represents deadweight loss in this monopsony labor market?

• w_azQ₁0

• vzy

• vxy

• w_bvxw_d

• w_bvQ₁0

What wage and quantity combination will this firm choose to maximize profits?

• 600 workers, $70 per day

• 600 workers, $35 per day

• 400 workers, $25 per day

• 400 workers, $35 per day

• 400 workers, $55 per day