Unit 5 exam free response portion1. Assume the following information is for a monopsony in a small Idaho town:ACDC Poster Inc.Number ofWorkers01Wage rate(per hour)$4.004.505.005.506.007.008.009.0010.002D. If the price for each output were $5:i.ii.345678TotalProduct02050708086888987A. Given the information, what is the marginal physical product of the 4th worker?B.Explain why the marginal physical product increases, decreases, and then goes negative. What is thiscalled and why does it happen?C. Assuming that the firm cannot use wage discrimination, what is the marginal resource cost of the3rd worker? How did you calculate it?What would be the marginal revenue product of the 8th worker?How many workers will this monopsony hire and at what wage rate? Why?E. How would this market's wage rate and employment level be different if they were in a perfectlycompetitive labor market?F. Draw and properly label a generic monopsonistic labor market, including MRC, MRP, demand, andsupply. Label the equilibrium for monopsony. 2. Initially a country's labor market is competitive and in long-run equilibrium. Now assume that newworkers enter the labor market.A) Assuming no other changes, explain how the increase in the number of workers will affect each of thefollowing in the short run:i. The wage rate of workersii. The costs of production for a typical firmiii. The price of goods produced by the workersB) Assume that the demand for the goods produced by the workers in part A decreases. Explain theeffect of this decrease on each of the following:i. The price of goods produced by the workersii. The demand for laboriii. The wage rate of workersC) Now assume that legislation requiring the establishment of a national minimum wage is proposed.Explain at what level this minimum wage would need to be set to be effective.D) Explain how the imposition of the minimum wage in part C would affect each of the followingi. The number of workers employed in the labor marketii. The costs of production for a typical firm

The MPP is an important concept in economics as it helps firms determine the optimal level of input…

Unit 5 exam free response portion 1. Assume the following information is for a monopsony in a small Idaho town: Wage rate (per hour) $4.00 4.50 5.00 5.50 6.00 7.00 8.00 9.00 10.00 ACDC Poster Inc. Number of Workers 0 1 2 3 4 5 6 7 8 F. A. Given the information, what is the marginal physical product of the 4th worker? B. Explain why the marginal physical product increases, decreases, and then goes negative. What is this called and why does it happen? D. If the price for each output were $5: i. ii. Total Product 0 20 50 70 80 86 88 89 87 C. Assuming that the firm cannot use wage discrimination, what is the marginal resource cost of the 3rd worker? How did you calculate it? What would be the marginal revenue product of the 8th worker? How many workers will this monopsony hire and at what wage rate? Why? E. How would this market's wage rate and employment level be different if they were in a perfectly competitive labor market? Draw and properly label a generic monopsonistic labor market, including MRC, MRP, demand, and supply. Label the equilibrium for monopsony.

Unit 5 exam free response portion 1. Assume the following information is for a monopsony in a small Idaho town: Wage rate (per hour) $4.00 4.50 5.00 5.50 6.00 7.00 8.00 9.00 10.00 ACDC Poster Inc. Number of Workers 0 1 2 3 4 5 6 7 8 F. A. Given the information, what is the marginal physical product of the 4th worker? B. Explain why the marginal physical product increases, decreases, and then goes negative. What is this called and why does it happen? D. If the price for each output were $5: i. ii. Total Product 0 20 50 70 80 86 88 89 87 C. Assuming that the firm cannot use wage discrimination, what is the marginal resource cost of the 3rd worker? How did you calculate it? What would be the marginal revenue product of the 8th worker? How many workers will this monopsony hire and at what wage rate? Why? E. How would this market's wage rate and employment level be different if they were in a perfectly competitive labor market? Draw and properly label a generic monopsonistic labor market, including MRC, MRP, demand, and supply. Label the equilibrium for monopsony.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter11: Labor Markets

Section: Chapter Questions

Problem 1SQ

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