A monopsonist that faces a labor supply curve of the form l = 4w and has a constant marginal revenue product of 50 per unit of l, will opt for the following, w, l combination:
a. w = 10 l = 40.
b. w = 25 l = 100.
c. w = 50 l = 200.
d. w = 100 l = 400.
b
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Movements along the consumption function are called
a. autonomous consumption. b. leakage consumption. c. induced consumption. d. injected consumption.
Wage and MFC differ for a monopsonist because:
A. the monopsonist is forced to pay a wage greater than the worker's MFC. B. the monopsonist must accept the market wage rate. C. workers are not as efficient when employed by a monopsonist. D. any wage increase applies to all workers, not just to the next hired.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point E necessarily represents
A. only motorcycles being produced. B. overallocation of resources. C. an impossible production point. D. technological advancement.
What are the implications of a liquidity trap for the Federal Reserve?
What will be an ideal response?