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amount by which a firm's total resource cost increases as the result of hiring one more unit of the resource.

marginal resource cost

Assume the Ajax Mining Company hires 80 percent of the nonunion labor force of Mother Lode, New Mexico. Also, suppose that this labor force is highly immobile. Economists would describe this employer as a:
A) monopolist. B) oligopolist. C) monopsonist. D) monopolistic competitor.

c

bilateral monopoly

Market with only one seller and one buyer

Construction workers frequently sponsor political lobbying in support of greater public spending on highways and public buildings. One reason they do this is to increase...

demand of construction workers

A craft union attempts to increase wage rates by:
A) equating the MRP and the MRC curves. C) shifting the labor supply curve to the right.
B) shifting the labor supply curve to the left. D) shifting the MRP curve to the right.

b

craft unions only support workers that

have a particular skill

demand curve slopes ______ because of ______

down , law of diminishing returns

exclusive unionism

The practice of a labor union of restricting the supply of skilled union labor to increase the wages received by union members; the policies typically employed by a craft union

Exclusive unionism attempts to increase wage rates by:

decreasing supply of labor

A firm hiring labor in a perfectly competitive labor market faces a horizontal labor supply curve and

downward sloping labor demand curve.

goods and services worker can purchase with his nominal wage : purchasing power

real wage

he United Mine Workers is a good illustration of what type of unionism?

inclusive

If a firm faces an upsloping labor supply curve (and there is no union or minimum wage), its:
A) MRC curve is also upsloping. C) MRP curve is perfectly inelastic.
B) MRC curve is perfectly elastic. D) MRP curve is also uploping.

a

If a single large employer bargains with an inclusive union, the resulting labor market model can best be described as:
A) a cartel. B) countervailing power. C) a bilateral monopoly. D) an internal labor market.

bilateral monopoly

If an industrial union is formed to bargain with a monopsonistic employer, then in this labor market employment may either .... to employment

increase or decrease

In a labor market characterized by bilateral monopoly the wage rate will be

logically indeterminant

In a monopsonistic labor market the employer will maximize profits by employing workers up to that point at which

MRP = MRC

inclusive unionism

The practice of a labor union of including as members all workers employed in an industry

Inclusive unionism is practiced mostly by:
A) professional and semiprofessional employees.
B) small unions comprised of skilled workers, such as the bricklayers.
C) industrial unions.
D) craft unions.

c

increase in total revenue resulting from the hire of one more unit of labor

marginal revenue product

intersection of labor _______ and ______ determine the equilibrium wage rate and level of employment in a purely competitive labor market.

demand and supply

the labor supply and marginal labor (resource) cost curves will coincide and be perfectly elastic if a firm is hiring in a...

purely competitive firm

The labor supply curve facing a purely competitive employer is __________ whereas the labor supply curve facing a monopsonist is ___________.

horizontal, upwards sloping

The labor supply curve for a particular occupation is upsloping because:

higher wages will be needed to attract workers from other occupations.

Labor unions are restrained in their wage demands because the labor demand curve

is downsloping

Labor unions may attempt to raise wage rates by:
A) increasing the supply of labor.
B) forcing employers, under the threat of a strike, to pay above-equilibrium wage rates.
C) decreasing the demand for labor.
D) increasing the price of complementary resources.

b

A large hospital in a relatively small city finds that, if its demand for nurses increases, the wages of nurses will rise. We can say that the hospital is

monopsonist

many firms compete in hiring specific types of labor, numerous equally qualified workers supply that labor and no one controls market wage

purely competitive labor market

marginal productivity theory of income distribution

the theory that the distribution of income is determined by the marginal productivity of the factors of production that individuals own

The market supply curve for labor is upsloping because

of the opportunity cost of labor in housekeeping, leisure, or alternative employments.

the money received by workers per unit of time (per hour)

nominal wage

A monopsonist's wage cost in hiring an additional worker is the:
A) worker's wage rate.
B) worker's wage rate plus the wage increases paid to all workers already employed.
C) worker's wage rate adjusted for the lower price that must be charged for the extra output.
D) marginal wage cost less the wage rate.

b

A monopsonistic employer in an unorganized (nonunion) labor market will:
A) pay a wage rate less than labor's MRP.
B) pay the same wage rate but hire fewer workers than if the market was purely competitive.
C) hire the number of workers indicated by the intersection of the MRC and the labor supply curves.
D) pay a wage rate in excess of labor's MRP.

As compared to a purely competitive labor market, in a nonunionized monopsonistic labor market wages:
A) and employment will both be lower. C) will be lower, but employment will be higher.
B) will be higher, but employment will be lower. D) and employment will both be higher.

both a

monopsony

(economics) a market in which goods or services are offered by several sellers but there is only one buyer

monopsony is a wage....

maker

MRP = Wage Rate.

purely competitive labor market

Occupational licensing has much the same effect as:

exclusive unionism

Occupational licensing:
A) functions essentially the same as inclusive unionism.
B) attracts large numbers of workers and therefore depresses wages.
C) often restricts occupational entry and raises the incomes of licensees.
D) has been declared illegal in the majority of states.

c

Other things equal, the monopsonistic employer will pay a:
A) lower wage rate and hire fewer workers than will a purely competitive employer.
B) higher wage rate but hire fewer workers than will a purely competitive employer.
C) lower wage rate but hire a larger number of workers than will a purely competitive employer.
D) higher wage rate and hire a larger number of workers than will a purely competitive employer.

a

the outcome in a monopsony labor market is shown by

W<MRP ; W<MRC

over long periods of time productivity and real wages tend to

rise together

The productivity and real wages of workers in the industrially advanced economies have risen historically partly because:

workers have been able to use larger quantities of capital equipment.

productivity of US labor has _____ over the long run causing demand to shift ______ more rapidly then increasing the supply of labor.

increased, rightward

A profit-maximizing firm will:
A) expand employment if marginal revenue product exceeds marginal resource cost.
B) reduce employment if marginal revenue product exceeds marginal resource cost.
C) expand employment if marginal revenue product equals marginal resource cost.
D) reduce employment if marginal revenue product equals marginal resource cost.

a

purely competitive labor markets maximize profits and minimize losses when

marginal revenue product = marginal resource cost

supply curve for labor slopes ________ in a purely competitive labor market because as a group must pay higher wage rates to obtain more workers

upward

T?F A purely competitive seller will pay workers a wage rate equal to their MRP.

t

T?F monopsony is common in the US

f

t/f : Marginal resource (labor) cost will always exceed the wage rate when the employer is selling its product in an imperfectly competitive market.

false

t/f :A monopsonistic employer may sell its product in a competitive market.

true

T/F A monopsonistic employer will pay workers a wage rate equal to their MRP.

F

T/f Marginal resource (labor) cost will exceed the wage rate when there is imperfect competition in the hire of labor.

true

T/F n imperfectly competitive seller will pay workers a wage rate equal to their MRP.

t

T/F Other things equal, a monopsonist will pay a lower wage rate than will a firm hiring labor competitively.

true

t/f: Advocates of the minimum wage argue that its effects should be analyzed within the context of a dynamic and imperfectly competitive labor market.

true

t/f: Critics of the minimum wage contend that higher minimums cause employers to move up their labor demand curves, reducing employment of low-wage workers.

true

t/f: Efficiency wages are determined at below-equilibrium levels

false

t/f: The rising general level of real wages in the United States has occurred because growing population has increased the supply of labor relative to the demand for it.

false

t/f:Human capital investment refers to spending on education and worker training.

true

t/f:ndustrial unions are more likely to increase wage rates by restricting the supply of labor than are craft unions.

false

t/f:Noncompeting groups of workers are the result of geographic immobilities.

false

t/f:Piece-rates may not be appropriate pay in some situations because they might reduce product quality.

true

t/f:Seniority pay is the same as piece rate pay.

false

t/f:Shirking refers to the behavior of workers who provide less-than-expected effort on the job.

true

t/f:The labor supply curve of a purely competitive firm is perfectly inelastic.

false

t/f:The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.

true

t/f:The principal-agent problem in labor markets arises because of the possibility of shirking by workers.

true

the top triangle and bottom retangle represent

non labor costs and total wage costs

tot determine a firms total revenue from employing number of labor units we sum up.....

the MRP's of those units

A union may increase the demand for the services of its constituents by all of the tactics below except:
A) successfully increasing labor productivity.
B) lobbying for increases in public expenditures on the product it is producing.
C) successfully advertising the product it is producing to private consumers.
D) increasing the price of products that are complements for the one it is producing.

D

uppose the MRP of a firm's twelfth worker is $22 and the worker's marginal wage cost is $16. We can say with certainty that the firm:
A) is hiring labor in a competitive labor market at a wage rate of $16.
B) is hiring labor in a monopsonistic labor market.
C) will find it profitable to hire fewer workers.
D) will find it profitable to hire more workers.

d

vacation insurance and pensions are all examples of

fringe benefits

the wage rate paid by the employer varies directly with the number of workers employed

monopsony

what are top reason for high productivity? 4

plentiful capital, access to abundant resources, advanced technology, and labor quality

when a monopsonistic employer bargains with an inclusive union.

bilateral monopoly

when producers add more real output per hour then the ________ is available to distribute

nonreal income

Which of the following is most likely to be an example of monopsony?
A) the market for fast-food workers in a large summer resort town
B) the market for card dealers in Las Vegas.
C) the market for major league baseball umpires.
D) the market for retail sales clerks in a major city.

c

Which of the following unions best represents the exclusive unionism model?
A) the mine workers B) the teamsters C) the carpenters D) the steelworkers

c

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