A monopsony has an upward sloping supply curve because
A) diminishing marginal product to scale does not exist in a monopsony.
B) each additional unit of labor costs less.
C) when more units of labor are hired, all laborers must receive the higher wage.
D) when more units of labor are hired, only the new workers receive the higher wage.
Answer: C
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Suppose that at current consumption levels an individual's marginal utility of consuming an extra hot dog is 10 whereas the marginal utility of consuming an extra soft drink is 2 . Then the MRS (of soft drinks for hot dogs)—that is, the number of hot dogs the individual is willing to give up to get one more soft drink—is:
a. 5. b. 2. c. 1/2. d. 1/5.
Which of the following will not shift the demand curve for grapefruit?
a. An announcement that eating a grapefruit before every meal will induce weight loss. b. A technical development that allows machines to replace the workers who harvest grapefruit. c. An announcement that eating lots of grapefruit causes skin problems. d. A newspaper story reporting that the preference for oranges has skyrocketed. e. An announcement that grapefruit will definitely cost more next week.