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

question 7

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.

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Definitions:

Maintenance Costs

The expenses incurred to keep an asset in usable condition or restore it to its original condition without enhancing its value.

Depreciation Method

A systematic approach used to allocate the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Composite Depreciation

A depreciation method that applies a single depreciation rate to a group of assets with different lives, treating them as a single asset.

Group Depreciation

A method of depreciation where a group of assets with similar life spans is depreciated as a single asset.