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A monopsonist has a rising MRC curve. Why? It pays a wage lower than the competitive wage. Why? A union and a monopsonist comprise a bilateral monopoly. Why would a worker prefer to be in a union in such a situation? Why might firms voluntarily pay a wage greater than the competitive (market clearing) wage?

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Nusrat FatimaLv10
28 Sep 2019
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Related questions

A monopsonist faces a labor supply curve given by LS =300 + 0.01w, where w is the annual salary.

a. What is the lowest salary the firm can pay yet still induce one worker to want to work for the firm? What is the lowest salary the firm must pay to induce two workers to work for the firm?

b. What is the marginal cost to the firm of adding a second worker given that it must pay all employees the same wage? Is this greater than, less than, or equal to the wage paid to each of the two workers?

c. In general, the marginal cost of hiring additional labor for this firm is given by MW C = 29, 900 + 200L. If the firm's labor demand curve is given by LD = 398 - 0.01w, what is the profit-maximizing number of workers the monopsonist should hire? What is the salary the workers will be paid?

A monopsonist faces a labor supply curve given by LS = 300 + 0.01w, where w is the annual salary.

a. What is the lowest salary the firm can pay yet still induce one worker to want to work for the firm? What is the lowest salary the firm must pay to induce two workers to work for the firm?

b. What is the marginal cost to the firm of adding a second worker given that it must pay all employees the same wage? Is this greater than, less than, or equal to the wage paid to each of the two workers?

c. In general, the marginal cost of hiring additional labor for this firm is given by MW C = 29, 900 + 200L. If the firm's labor demand curve is given by LD = 398  0.01w, what is the profit-maximizing number of workers the monopsonist should hire? What is the salary the workers will be paid?

Question 1 (1 point) Right-to-work laws in individual states:

make it illegal to require union membership as a condition for continued employment.

were allowed by the Taft-Hartley Act of 1947.

make it illegal to run a "closed shop" in that state.

all of the above.

Question 2 (1 point) In the figure to the right, the wage rate that maximizes the total union member income earned is:

W2.

W1.

W3.

uncertain without more information.

Question 4 (1 point) An example of featherbedding would be:

a union trying to increase worker productivity.

a union trying to increase demand for union labor.

a union trying to increase demand for union-made products.

an act banned by the Taft-Hartley Act.

Question 5 (1 point) The Taft-Hartley Act of 1947 (the Labor Management Relations Act):

is the key legislative act that requires management to bargain with unions.

made certain union practices such as closed-shops illegal.

is the key legislative act that permits unions to organize and to strike.

is perceived by union leaders as the most important legislation enabling unions to improve the wages of their members.

Question 8 (1 point) In order to raise wages above the market level for its workers, a union must:

have monopsony power.

recruit better workers.

have the support of the government.

limit the supply of labor in an industry.

Question 9 (1 point) What are the effects of labor unions on wages and productivity?

Wages are lower for union members than non-union members because union dues are so high.

Productivity increases because the marginal factor cost is equated to the marginal revenue product of labor.

Wages are the same for union members and non-union members.

Productivity does not increase or decrease as the result of unions.

Wages are higher for union members than non-union members.

Productivity may decrease because of the way some collective bargaining rules specify how jobs should be done or productivity may increase due to reduced turnover.

Productivity increases due to reduced turnover or because of the way some collective bargaining rules specify how jobs should be done.

Question 10 (1 point) Under bilateral monopoly, the wage rate is:

indeterminate.

higher than the competitive wage rate.

equal to the competitive wage rate.

lower than the competitive wage rate.

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