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Quantity of Labor 53
Quantity of Labor 53. Refer to the above diagram. Assuming competitive market conditions, the firm represented will hire: A. Q2 workers and pay a W4 wage ratc. B. O workers and pay a W wage rate. C. O workers and pay a W. wage rate. D. Q workers and pay a Wi wage rate. 54. Refer to the above diagram. Assuming monopsony conditions, the firm represented will hire: A. by negotiating any wage rate between W. and W. B. by negotiating a wage rate greater than W.. C. only if it accepted a wage rate below W. D. only if it could shift the labor demand curve rightward. 55. Refer to the above diagram. Assuming an inclusive union is formed the firm represented would require the minimum wage rate: AWA B. W. C. W D.W. 56. Refer to the above diagram. Assuming bilateral monopoly, the wage rate would lie: A. between W-W2. B. between W-W.. C. between W.-W. D. between WW4
Expert Solution
ans 53=OPTION C
- Profit maximizing quantity to hire is Q3 (where MRP equals MRC)
- Allocatively effectual quantity to hire is Q3 (where VMP equals W)
54=OPTION C
- Profit maximizing quantity to hire is where MRP equals MRC
- Wage given is W1
55=OPTION B
-W3 is the labor union negotiated level of wage
- As all workers must be given W3 this becomes the new MRC (additional cost of hiring 1 more worker)
56=OPTION D
We cannot state what the quantity of labor will be / the level of wage, it depends upon negotiations between the firm & the union
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