Consider two labour markets that are identical, aside from the fact that one is a monopsony and the other is perfectly competitive. a) Which labour market would you expect to pay the higher wage? Explain. b) Which labour market would you expect to have the higher level of employment? Explain. c) Now, assume that the government implements a minimum wage in both labour markets. Specifically, the minimum wage is set equal to the perfectly competitive labour market's equilibrium wage. i) Do you expect the new minimum wage to increase/decrease/not affect the wage level in the monopsonistic labour market? Do you expect the new minimum wage to increase/decrease/not affect the employment level in the monopsonistic labour market? Explain. ii) Do you expect the new minimum wage to increase/decrease/not affect the wage level in the perfectly competitive labour market? Do you expect the new minimum wage to increase/decrease/not affect the employment level in the perfectly competitive labour market? Explain.

The following graph shows the labor market for research assistants in the fictional country of Universalia. The equilibrium wage is $10 per hour, and the equilibrium number of research assistants is 250. Suppose the government has decided to institute a $4-per-hour payroll tax on research assistants and is trying to determine whether the tax should be levied on the employer, the workers, or both (such that half the tax is collected from each side). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor demanded. You will not be…

The graph below provides a supply and demand curve for food servers, complete 1a – 1d using the graph.   1.a.  The equilibrium wage and the number of food servers employed per day, respectively, are: 1.b.  Suppose that in the interest of boosting incomes of the working poor, Congress imposes a minimum wage of $6.00 per hour. This minimum wage rate creates a(n): 1.c.  Assume that both input and output markets are perfectly competitive. If one additional server increases the number of meals sold by four per day and each meal sells for $10, each additional food servers will be paid: 1.d.  If the equilibrium wage rate increased, the cause could be that either:

Minimum Wages and Unions Assume an industry without legal minimum wages and unions. Show in a diagram how the equilibrium wage W* is determined, and briefly explain all the concepts in the diagram. Now suppose a minimum wage, WMIN, is legislated at a level lower than W*, i.e. WMIN<W*. Show it in the diagram and explain whether the labour market outcomes in part a. change, and how. Now suppose a minimum wage is legislated at a level higher than W*, i.e. WMIN>W*. Show it in the diagram and explain what the labour market outcomes will be. Now suppose a workers’ union is created and successfully negotiates wage WUNION, which is above both W* and WMIN, i.e. WUNION>WMIN>W*. Explain what the labour market outcomes will be compared to the previous part.

Suppose that for every hour worked in the labour market, single mothers use an hour of childcare, and the hourly childcare cost is π pounds. The members of Parliament are interested in evaluating the impact of two different policies: Policy 1: provides single mothers with a lump sum benefit. Policy 2: provides single mothers with a fixed tax cut for every pound earned. What are the impacts of these two policies on labour supply (hours worked and participation rates) of single mothers in the UK (United Kingdom)? Do you expect the impact of these two policies to be different? Why? (400 words)

Walmart employs the majority of people in small rural town. It's demand for labor is given by QD=100-2P. The supply of labor is given by Qs=3P. ✓ people would be If the labor market functioned as a competitive market, the wage rate (the price of labor) would be employed, and the producer surplus would be Because Walmart faces little competition for workers, it decides to offer the wage that maximizes consumer surplus (the monopsonist price). This wage is ✓being employed. The producer surplus is now ✓. Note: don't worry if the number of ✓, which results in workers is not an integer.

(2) Suppose you find the demand (Qd, as thousands) and supply (Qs, as thousands) for long-haul truck drivers in one market can be specified as functions of the yearly wage paid (W, as thousand $) as following. Demand for drivers: Qd = 155 – 1.5 * W, Supply of drivers: Qs = 36 + 0.25 * W, How much is the market equilibrium level of wage for truck drivers (as thousands) and the how many jobs will be in this market? Now you noticed a company pays 40% higher wage than the market equilibrium level to hire truck drivers, how to explain this case?