What does it mean when an economist says that a firm is buying labor in a competitive market?
What will be an ideal response?
If a firm is buying labor in a competitive labor market, it is a price taker. This means that the firm has no control over the wage that it pays to its workers. It is sufficiently small to be able to hire all of the labor it wants at the market equilibrium wage. The firm would also not be able to hire any labor at wages below their market level.
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A market with a large number of sellers
A) can only be a perfectly competitive market. B) might be an oligopoly or a perfectly competitive market. C) might be a monopolistically competitive or a perfectly competitive market. D) might be a perfectly competitive, monopolistically competitive, oligopoly, or monopoly market. E) can only be a monopolistically competitive market.
The U.S. record is superior to that of Europe in ________
A) growth in real productivity. B) real wage growth C) growth in employment D) All of the above