How does monopsony power evolve? What factors might aid its continued presence?
Monopsony may arise because a person within a given locality has only a relatively few choices of where to work. However, if the individual was willing to move, or the number of buyers of services potentially is enlarged, then the role of a monopsony is diminished. So monopsony power is more likely to be present where movement and search costs impede workers from seeking employment in different locales.
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Sonia works at a restaurant where tips are pooled and divided equally. Anna works at a different restaurant where she keeps the tips her customers leave for her. Which of the following is true?
a. Both work equally hard because their hourly wage from the employer is low, and they can make up for this with tips. b. Sonia works harder, because she receives the same amount of tips as other workers. c. Anna works harder, because she works at an expensive restaurant. d. Anna works harder, because her tips are her private property. e. Neither of them has an incentive to work hard because tips are a small part of their earnings.
In examining consumer behavior, one of the constraints faced by consumers is
a. happiness b. quantities consumed c. tastes and preferences d. entrepreneurial ability e. income
Figure 4-17
Refer to . Which of the following price controls would cause a shortage of 10 units of the good?
a.
a price ceiling of $5.50
b.
a price floor of $5.50
c.
a price ceiling of $6.50
d.
a price floor of $6.50