Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 14, Problem 12Q
To determine
The market concentration of two industries, given their respective HHI values.
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Use the graph to answer the question that follows.
Based on the graph, which of the following factors can cause the market labor supply curve for the telecommunications industry to shift from S1 to S2?
A-An increase in the marginal revenue product of every telecommunications firm
B-A decrease in the number of domestic residents immigrating to foreign countries
C-An increase in the wage rate of all telecommunications workers within the country
D-A decrease in the value of leisure time by all domestic telecommunications workers
E-An increase in the percentage of elderly individuals retiring from telecommunications
(2)Suppliers of factors of production in a perfectly competitive market respond to higher factor prices by ________ of their factors, ceteris paribus.
A-changing the quality. B-increasing the productivity. C-decreasing the productivity
D-increasing the quantity available. E-decreasing the quantity available
Which of the following statements are correct regarding the difference between markets and firms?
Working in a firm involves accumulation of firm-specific assets that will be lost if the connection to the firm is severed.
It is possible to employ division of labour within firms, while it is not possible in markets.
Markets involve a decentralisation of power, while firms represent a concentration of economic power.
Transactions within firms operate as contracts. Market transactions are not contracts.
(1) Based on the graph, which of the following factors can cause the market labor supply curve for the telecommunications industry to shift from S1 to S2? (the graph is attached on the bottom)
A-An increase in the marginal revenue product of every telecommunications firm
B-A decrease in the number of domestic residents immigrating to foreign countries
C-An increase in the wage rate of all telecommunications workers within the country
D-A decrease in the value of leisure time by all domestic telecommunications workers
E-An increase in the percentage of elderly individuals retiring from telecommunications
(2) In a monopsonistic market, firms will hire where ________ equals marginal revenue product and pay a ________ down to the supply curve.
A-demand; wage rate. B-demand; product price. C-marginal resource cost; wage rate
D-marginal resource cost; product price. E-marginal factor cost; product price
Chapter 14 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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