At any quantity, the marginal factor cost for a monopsonist is always
A. above the labor supply curve.
B. parallel to the marginal revenue product.
C. below the labor supply curve.
D. above the labor demand curve.
Answer: A
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A normal good is one
A) with a downward sloping demand curve. B) for which demand increases when the price of a substitute rises. C) for which demand increases when income increases. D) none of the above
There is a technological advance in a perfectly market. Which of the following statements is NOT true?
A) As more firms begin to use the new technology, the market supply increases and the price falls. B) Technological change brings permanent gains to producers and temporary gains to consumers. C) In the new long-run equilibrium, all the old-technology firms have exited. D) In the long-run equilibrium, competition eliminates any short-run economic profit.
When supply and demand for a product decrease simultaneously, we
A. can predict that both equilibrium price and quantity will increase. B. cannot predict the change in either the equilibrium quantity or equilibrium price. C. can predict that both equilibrium price and quantity will decrease. D. cannot predict equilibrium price, but know that equilibrium quantity will decrease.
In the above figure, the monopsonist will employ
A. L2 at a wage of W3. B. L1 at a wage of W3. C. L1 at a wage of W1. D. L2 at a wage of W2.