What is a monopsony and why is a monopsony able to pay a lower wage rate than a firm in a competitive labor market?
What will be an ideal response?
A monopsony is a market with a single buyer. A monopsony uses its market power to force down the price it pays for what it buys in a similar way to how a monopoly uses its market power to force upward the price of the good it sells. Compared to a competitive labor market, a monopsony in a labor market hires fewer workers. Because it hires fewer workers, it pays a lower wage rate.
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When the marginal product equals the average product, the
A) average product curve is downward sloping. B) average product curve is upward sloping. C) marginal product is at its maximum. D) average product is at its maximum.
Which of the following statements is (are) correct? Critics of the real business cycle model
a. question whether technology has ever been the cause of a recession. b. do not deny that some technology shocks affect many industries. However, they do not believe that there are enough of these shocks to explain recessions where output falls too as much as 10 percent below potential output. c. argue that aggregate supply changes drive most business cycles. d. All of the above e. None of the above
Use the above figure. Refer to the above diagram where curves (a) through (d) are for four different countries. Income is third most unequally distributed in
A) Country A. B) Country B. C) Country C. D) Country D.
Approximately how many slaves were brought from Africa to the New World during the operation of the transatlantic slave trade?
a. 50,000 b. 700,000 c. 5 million d. 10 million