A . Can you explain why some employees who work for monopsonists might feel that they are underpaid? b. Why can't the firm raise their wage rates to keep them from feeling this way?
a . They realize that their MRP is higher than their wage rate. Their contribution to the firm's revenues is
higher than the wages that they earn.
b. The firm can't afford to raise the wage rate for an employee whose MRP exceeds his/her wage rate,
since doing so would mean raising wages for all other employees, too. The marginal labor cost of the
raise would exceed the MRP of the worker, and firms will not hire workers when their MLC exceeds
their MRP.
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In the short run, a change in the nominal exchange rate brings an equivalent change in the real exchange rate
Indicate whether the statement is true or false
Economic inefficiency of a monopoly is indicated by
A) P = ATCmin. B) P > MR. C) P > MC. D) MR = MC.
Household production still exists because it often requires fewer specialized resources than market production does
a. True b. False
The domestic demand and supply for sugar are Qd = 700 ? 2P and QSD = 100 + 4P. The foreign supply is QSF = 150 + 3P. What is the domestic market price of sugar?
A. 110 B. 100 C. 150 D. 90