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Markets for Factors of Production - LOS d ~ Q1

Q1The labor market in a specific geographic area consists of one dominant employer and workers who are represented by a union. Compared to the wage rate and quantity of labor employed that would prevail in a competitive market, it is most likely that the outcome will be:

A)   a lower wage rate, but more workers will be hired.

B)   determined by bargaining between the two sides.

C)   a higher wage rate, but fewer workers will be hired.

 

Q2Compared to the competitive level of employment, a monopsonist employer hiring non-union workers most likely:

A)   hires more workers and pays a lower wage.

B)   hires fewer workers and pays a higher wage.

C)   hires fewer workers and pays a lower wage.

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