a. What happens to wages and employment if the government imposes a payroll tax on a monopsonist? Compare the response in the monopsonistic market to the response that would have been observed in a competitive labor market.b. Suppose a firm is a perfectly discriminating monopsonist. The government imposes a minimum wage on this market. What happens to wages and employment?

a. What happens to wages and employment if the government imposes a payroll tax on a monopsonist? Compare the response in the monopsonistic market to the response that would have been observed in a competitive labor market.b. Suppose a firm is a perfectly discriminating monopsonist. The government imposes a minimum wage on this market. What happens to wages and employment?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter14: Labor Markets And Income

Section: Chapter Questions

Problem 2SCQ: Table 14.11 shows levels of employment (Labor), the marginal product at each of those levels, and a...

See similar textbooks

Similar questions

Table 14.13 shows information from the supply curve for labor for a monopsonist, that is, the wage rate required at each level of employment. What is the monopsonists marginal cost of labor at each level of employment? If each unit of labors marginal revenue product is 13, what is the firms profit maximizing level of employment and wage?
Table 14.11 shows levels of employment (Labor), the marginal product at each of those levels, and a monopolys marginal revenue. What is the monopolys marginal revenue product at each level of employment? If the monopoly operates in a perfectly competitive labor market where the going market wage is 20, what is the films profit maximizing level of employment?
On a clearly labeled graph, show what happens to wages paid and employment if the government imposes a payroll tax on a monopsonist? Should the change in wages paid and employment be larger for a monopsonistic labor market or a perfectly competitive one? Explain your answer. Don't copy paste
How should a monopsonist decide how much of a product to buy? Will it buy more or less than a competitive buyer? Explain.
(C) Suppose the firm only produces good X and that the price of good Y, a substitute good, decreases. What will happen to the optimal quantity of labor the firm will hire? Explain. (d) If the labor market were a monopsony, would the monopsonist hire more, fewer, or the same number of workers as Que to maximize its profit?
1. How is the wage rate and level of employment determined if the labor market was controlled by a monopsonist. Discuss and explain in detail with the help of diagrams.
1. Use the graph to answer the question that follows. If the price is set to P1, what area represents the producer surplus in the graph shown above? D B + C + D C + D + F B + C + D + G B + C + D + E + F 2. The graph below represents the labor supply curve of a monopsonistic firm. What is the quantity of labor and the wage that will maximize the firm's profits? Firm's profits are maximized at quantity = Q1 and wage = W4 Firm's profits are maximized at quantity = Q2 and wage = W3 Firm's profits are maximized at quantity = Q2 and wage = W5 Firm's profits are maximized at quantity = Q3 and wage = W1 Firm's profits are maximized at quantity = Q1 and wage = W2
The more elastic the labour supply is, the smaller the wage paid by a monopsonist. True or False?
True, False, and Explain. If labor is hired in a monopsonistic market, a minimum wage will always guarantee employment will increase.
1. A monopsonist maximizes profit when Select one: a.marginal revenue product of labor equals marginal cost. b.its marginal revenue product of labor equals its marginal expenditure on labor. c.marginal revenue equals marginal cost. d.marginal revenue product is set equal to zero. 2. During the winter months, the price of natural gas is high. During the summer months, the price of natural gas is low. This could be an example of Select one: a.third-degree price discrimination. b.second-degree price discrimination. c.bundling. d.first-degree price discrimination 3. What of the following is completely true in long run, monopolistically competitive equilibrium? Select one: a.the slope of the demand and average cost curves are the same, P = MC, and MC = MR. b.the slope of the demand and average cost curves are the same, P > MC, and MC = MR. c.the slope of the demand and average cost curves are negative, P > MC, and MC > MR d.the slope of the demand and…
Firm Alpha is a monopsonist in the labor market. The firm’s marginal value of labor is MVL = 105 - 3L. The labor supply is LS = 0.5w. The monopsonist uses its market power to maximize its own profit. The monopsonist hires L= workers and pays a wage w=. The deadweight loss in this market is DWL=.
Question 16 : What is meant by a " price taker " ? Question 16 options : a ) A monopsonist consumer can set the market price b ) No consumer or producer can determine the market price c ) Consumers have perfect information d ) Producers have more information than consumerse