The Labour Supply Curve Facing a Monopsonist Is Positively Sloped

question 4

Multiple Choice

The labour supply curve facing a monopsonist is positively sloped because:

• A)the monopsonist must pay a higher wage if it wishes to attract more labour.
• B)these workers are scarce and drive up the wage rate.
• C)government intervenes in the labour market.
• D)the monopsonist only hires skilled labour.

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Definitions:

MRP

Marginal Revenue Product, a term in economics that represents the additional revenue generated by employing one more unit of a factor, such as labor or capital.

Investment

The allocation of resources, such as capital or time, in order to generate future profit or income.

Usury Laws

Statutes that set maximum interest rates that can be charged on loans, intended to protect consumers from excessively high rates.

Interest Rates

The cost of borrowing money or the return on investment, typically expressed as a percentage of the principal.