Markets for Factors of Production LOSD习题精选 2010, efficient, possible, specific

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LOS d: Describe the effects on wages of labor unions and of a monopsony and explain the possible consequences for a market that offers an efficient wage.

The 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.

The wage level and quantity of labor will be determined by bargaining and will likely fall somewhere between the results of employers competing for unionized workers and a monopsonist hiring from a competitive labor pool.

 

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Compared 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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A monopsonist employer hires additional workers up to the point where the marginal cost of an additional worker is equal to that worker’s marginal‘s revenue product. The wage rate and the quantity of labor at that point are both lower than they would be in a competitive labor market.