Labour markets - perfect vs imperfect

Which of these is not an assumption of perfectly competitive labour markets?

• There is perfect information

• High barriers to entry or exit

• Wage takers

• Large number of buyers and sellers

In a perfectly competitive labour market, the supply of labour facing an individual firm is...

• Perfectly elastic

• Perfectly inelastic

A perfectly competitive firm’s level of employment (or demand for labour at each wage rate) would be where...

• MRPL=AFC

• MRPL=AVC

• MRPL = W

• MRPL=D

A fall in labour productivity would affect which curve?

• Labour Supply

• Labour Demand

In terms of the labour market, what does a Monopsony firm mean?

• Only one seller

• Only one buyer

• Only one employee

• Only one employer

In a monopsony market the AC curve is not the same as the MC curve. Why?

• The MC incurred by employing an extra worker is the change in total amount by which the wage bill rises and not just the wage rate paid to the additional worker.

• The MR received by the firm is greater than the MC of the additional worker.

• The AC received by the firm is greater than the MC of the additional worker.

As with all profit maximising firms, the firm will seek to employ workers up to the point at which...

• MRPL = MCL

• MRPL = ACL

• MRPL = SL

• DL = SL

What determines the wage rate in a monopsonistic market?

• MCL

• ACL

• MRPL

• MPPL

In a perfectly competitive market, the wage rate will be higher or lower than in a monopsonistic market?

• Higher

• Lower

Which of these does not explain why there is a wage differential in labour markets?

• Discrimination

• Inactive workers

• Imperfect information

• Immobility of labour