Answer the following statements true (T) or false (F)
1. In a purely competitive labor market, an individual firm must pay a rising price for labor if it wants to acquire more labor.
2. If a firm must pay a daily wage of $35 to hire 11 workers, and a daily wage of $40 to hire 12 workers, its marginal resource cost of hiring the twelfth worker is $40.
3. A monopsonist in the labor market tends to hire more workers than would be hired if the labor market were purely competitive.
4. A monopsonist faces an upsloping supply curve of labor, but it could face a horizontal demand curve for its product in the output market.
1. FALSE
2. FALSE
3. FALSE
4. TRUE
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What does marginal cost equal?
a. total output divided by the change in total cost b. total cost divided by quantity of output produced c. the change of total cost divided by the change of output d. average cost divided by output
The greater the consumer's reluctance to shift brands, the lower the price elasticity of demand
a. True b. False Indicate whether the statement is true or false