According to the textbook, if firms are competitive, then labor-market discrimination is Select one: А. certain to be more of a problem than if the market were monopolistic or imperfectly competitive. В. certain to be nonexistent in the short run and in the long run. C. not likely to be a long-run problem unless customers exhibit discriminatory preferences or government maintains discriminatory policies. D. more likely to be a problem in the long run than in the short run, due to the zero- profit condition that characterizes long- run equilibrium for competitive firms. Е. Both A and D

According to the textbook, if firms are competitive, then labor-market discrimination is Select one: А. certain to be more of a problem than if the market were monopolistic or imperfectly competitive. В. certain to be nonexistent in the short run and in the long run. C. not likely to be a long-run problem unless customers exhibit discriminatory preferences or government maintains discriminatory policies. D. more likely to be a problem in the long run than in the short run, due to the zero- profit condition that characterizes long- run equilibrium for competitive firms. Е. Both A and D

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter15: The Shortcomings Of Free Markets

Section: Chapter Questions

Problem 5TY

See similar textbooks

Similar questions

3. [TRUE / FALSE] pls explain When a monopsonist is operating in the long-run, then at theprofit-maximizing output average cost can be increasing.
Suppose that the Ebay warehouse behaves as a monopsonist in the local labor market. Assume that its labor supply curve is w(LS) = 4LS and its labor demand curve is w(LD ) = 42.8−2LD. To maximize its profits: a. how many units of labor will Ebay hire and b. what wage will Ebay pay? Now suppose that the local labor union goes on strike and Ebay is eventually forced to increase the pay of its workers to a competitive wage. What wage would Ebay then have to pay? c. Find competitive wage The correct answers are: a. 4.28 b. 17.12 c. 28.52
Suppose that the supply curve for the labour to a firm is given by L = 100W and the marginal expense of labour curve is given by MEL = L/50 where W is the (nominal) market wage. Suppose also that the firm’s demand for labour (marginal revenue product) curve is given by L = 1, 000 − 100MRPL. a) If the firm acts as a monopsonist, how many workers will it hire in order to maximise profits? What wage will it pay? How will this wage compare to the MRPL at this employment level? b) Assume now that the firm must hire its workers in a perfectly competitive labour market. How many workers will the firm hire now? What wage will it pay? c) What is the deadweight loss from the labour market for a monopsonist? Graph your results and show the DW L
Imagine there is a firm that only uses labor to produce goods and that its production function is given by Y(L)=5L-L^2. The price of the firm’s output is equal to 1. Let’s assume the firm is a price taker on the product market but is a local monopsony for employment. Imagine that its marginal cost is given by 2+L. Imagine that labor supply is given by 1+L How much labor does the firm want to use? What will be the wage it pays? How many people will work if the government imposes a minimal wage of 2.25? How will this affect the firm’s profit? Calculate and compare before and after the introduction of the minimum wage.
1. Consider a firm in a perfectly competitive industry that must decide how much labor to hire (in the short run, i.e., in the background the capital is fixed). The firm’s marginal product of labor is 110-5L. It takes as given an output price P = 2, and the wage = 20. a. Please calculate the optimal quantity of labor for this firm to hire within this setting. b. Would a monopsonist employer in this same situation hire more or less labor? Why? c. Discuss a possible basis for state regulations of employment within 'company towns'.
Consider a manufacturing firm in a labor market that isperfectly competitive. There are two kinds of workers: productiveworkers whose marginal revenue product is $48,000 per year, andlazy workers whose marginal revenue product is $40,000 per year. Itis difficult for the firm to differentiate between productive andlazy workers. A local college offers a new yearlong astronomy course. Althoughthe cost of tuition is the same for both types of workers, thepsychic cost of having to work hard and get a passing grade islower for productive workers because they are able to learn morequickly than lazy workers. Therefore, the cost of taking the class(including the cost of tuition as well as the psychic cost) is$5,000 per year for a productive worker and $10,000 per year for alazy worker. Because astronomy has little relevance tomanufacturing, taking the class does not increase or decrease aworker's productivity. The firm uses the class as a way to differentiate betweenproductive and lazy…
(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?
3. In a von Thunen model with homogeneous labor with subways and cars, an improvement in automobile speed (e.g. due to better roads) will . . . A. Raise rents in the areas where the residents use cars, because these areas are more attractive now. B. Raise rents in the areas where the residents use subways because landlords there feel less com- petitive pressure from the landlords in the automobile areas. C. Reduce the number of people living in areas where people use cars because the price of housing is higher there. D. None of the above.
(a) Explain why we might expect labor demand for a monopolist in the product market to be less elastic than labor demand under perfect competition ?
Question Three Assume that the labour market is characterized by monopsony power. Illustrate and explain how the government can maximize employment levels by imposing a minimum wage. The marginal revenue product of labor at the local sawmill is MRPL = 20 - 0.5L, where L = the number of workers. If the wage of sawmill workers is K10 per hour, then how many workers will the mill hire? What factors that determine demand for labour by the firm? Who are the main actors in the labour markets? What are their roles?
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?
The inverse labour demand curve of a monopsonist employer is W = 40,500 – 105L, where W is the annual salary and L is the number of workers hired. The labor supply is given by W = 10,600 + 104L. (a) The marginal expenditure equation is ME= . Do not include a comma in your answer. Please use capital letters (e.g. L not l) (b) To the nearest integer, the monopsonist would hire workers and, given that number of workers, the salary they would pay is, rounded to 2 decimal places (e.g. 4.12) . Do not include a comma in your answer.