Under monopsony, the wage rate
A) equals the marginal product of labor.
B) equals the marginal revenue product of labor.
C) is less than the marginal revenue product of labor.
D) is greater than it would be under perfect competition.
C
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Health insurance companies impose deductibles on policies and copayments on claims to
A) increase prices. B) increase sales. C) reduce the moral hazard problem. D) increase asymmetric information.
If there are 200 physicians per 100,000 population in the United States generally, but over 500 per 100,000 population in San Francisco,
A) physicians are not scarce in San Francisco. B) physicians particularly enjoy living and working in San Francisco, for financial and other reasons. C) residents of San Francisco necessarily need more medical services than the average American. D) there is a shortage of patients in San Francisco. E) there is a surplus of physicians in San Francisco.
Suppose Ford, GM, and Dodge make the majority of pick-up trucks sold in the United States If they all sell for approximately the same price, and Ford offers a $2,000 rebate on new truck sales, what can Ford expect to see?
a. an unprecedented increase in truck sales b. an immediate response by GM and Dodge c. a visit from the antitrust authorities of the government d. a revolution from Ford stockholders e. announcements by GM and Dodge that plans are underway to produce a much cheaper pick-up truck in six years
Doug wants to start up his own business, and needs $25,000 to get it off the ground. He can either withdraw it from his savings account, where he currently earns 3 percent, or he can take out a loan for $25,000 and pay 5 percent interest. Doug should compare:
A. the explicit cost of $750 to the implicit cost of $1,250 and choose to use his savings. B. the explicit cost of $25,750 to the explicit cost of $26,250 and choose to borrow the money. C. the implicit cost of $750 to the explicit cost of $1,250 and choose to borrow the money. D. the implicit cost of $750 to the explicit cost of $1,250 and choose to use his savings.