Suppose that a mining company employs 80% of the available laborers in a town. Explain what will happen to the number of laborers hired and the wage rate paid by the mine if a minimum wage is set at the competitive level
What will be an ideal response?
The mine was operating as a monopsony. The competitive minimum wage will result in the mine hiring a competitive level of laborers at the higher competitive wage.
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The assumption that the magnitude of the slope of an indifference curve decreases moving to the right along the indifference curve is known as the assumption of
A) the price effect. B) a diminishing marginal rate of substitution. C) an increasing marginal rate of substitution. D) an indifference curve effect.
The paradox of value between diamonds and water is explained by the fact that the
A) total utility of diamonds exceeds the total utility of water. B) marginal utility of diamonds exceeds the marginal utility of water. C) total utility of diamonds exceeds the marginal utility of water. D) marginal utility of diamonds exceeds the total utility of water.
Suppose the opportunity cost is a constant 500 TV sets for 1 car in Canada and 1,000 TV sets for 8 cars in Mexico. Then, if both countries specialize in accordance with their comparative advantage, the production of 1,000 extra TV sets in one country and 1,000 fewer TV sets in the other would imply that the world as a whole can have
a. 2 more cars b. 6 more cars c. 8 more cars d. 125 more cars e. 500 more cars
Which of the following would be an external cost in the market for cigarettes?
a. price of a pack of cigarettes b. loss of income for the smoker resulting from extra missed days of work c. higher life insurance premiums paid by the smoker due to smoking d. loss in utility in smoking by the smoker because the smoker must stand outside her office building in the cold winter to smoke e. increased risk of cancer to the nonsmoking passengers in the smoker's car pool