The monopsonist will employ labor to the point at which the
A) marginal factor cost equals the marginal revenue product of labor.
B) marginal revenue product equals the wage rate.
C) marginal cost of output equals the marginal revenue.
D) demand equals the supply of labor.
Answer: A
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In the above figure, if the demand curve is D2, then
A) the equilibrium price will be P1 and the equilibrium quantity will be Q2. B) the equilibrium price will be P1 and the equilibrium quantity will be Q1. C) there will be a shortage equal to Q2 - Q1. D) an increase in price will shift the demand curve to D3.
One reason that education has external benefits is that
A) knowledge has diminishing marginal productivity. B) education creates job opportunities for teachers. C) education creates better citizens. D) property owners pay taxes to support the school system.