Monopsony EconPlusDal

What is a monopsony?

• A market with many employers

• A market with a single employer

• A market with no competition

• A market with many workers

In the UK, which professions are considered to be employed by a monopsony?

• Engineers and Doctors

• Chefs and Waiters

• Teachers and Nurses

• Lawyers and Accountants

What power do monopsonies have over wages?

• They are wage makers

• They follow the market wage

• They are wage takers

• They have no influence on wages

What condition do monopsonies maximize revenue under?

• Where average cost equals marginal cost

• Where MRP equals the marginal cost of labor

• Where demand equals supply

• Where supply exceeds demand

Why is the supply of labor for a monopsony equal to the average cost of labor?

• Because it represents the wage at different quantities of labor

• Because it reflects the minimum wage workers will accept

• Because it is determined by government regulations

• Because it represents the maximum wage they are willing to pay

What happens to wages and employment in a monopsony compared to a competitive labor market?

• Wages decrease but employment increases

• Both wages and employment decrease

• Both wages and employment increase

• Wages increase but employment decreases

How do monopsonies affect the wages of workers compared to their MRP?

• Workers' wages are not related to their MRP

• Workers are paid less than their MRP

• Workers are paid equal to their MRP

• Workers are paid more than their MRP

What does MRP stand for?

• Marginal Rate of Production

• Maximum Retail Price

• Market Research Panel

• Marginal Revenue Product

What is the significance of the point where MRP equals the marginal cost of labor for a monopsonist?

• It determines the maximum number of workers to hire

• It is the point of minimum wage

• It indicates the start of profit loss

• It is where the supply of labor exceeds demand

How is the wage determined in a monopsony labor market?

• By the supply of labor

• By the demand for labor

• By government regulation

• By the average cost of labor