If a Monopsonist Pays the Wage Rate W, Then the Amount

question 10

Multiple Choice

If a monopsonist pays the wage rate w, then the amount of labor that he can hire is L(w) = Aw, where A is a positive constant. The marginal cost of labor to the monopsonist is

• A) equal to the wage rate.
• B) twice the wage rate.
• C) half the wage rate.
• D) greater than the wage rate but less than twice as great.
• E) less than the wage rate but more than half as great.

Assess the role of unions and certification requirements on labor supply and wages.

Predict the implications of external market changes on resource demand and supply.

Explain how changes in resource prices influence market equilibrium and business strategies.

Understand the impact of factor mobility on the supply elasticity of resources.