EBK MICROECONOMICS
5th Edition
ISBN: 9781118883228
Author: David
Publisher: YUZU
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Question
Chapter 11, Problem 11.32P
To determine
The magnitude of the marginal revenue product of labor in relation to the wages paid to workers currently.
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Students have asked these similar questions
Consider a monopsonist that hires 4.28 units of labor at a wage of 19.26. If the marginal value placed on the last worker hired is 41.22
a.) what is the elasticity of labor supply for this monopsonist?
[Q: 11-9412503] Consider a monopsonist that hires 5.17 units of labor at a wage of 21.71. If the marginal value placed on the last worker hired is 47.92, what is the
elasticity of labor supply for this monopsonist?
Elasticity of labor supply:
(Enter your answer rounded to two decimal places)
The more elastic the labour supply is, the smaller the wage paid by a monopsonist.
True
False
Chapter 11 Solutions
EBK MICROECONOMICS
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- The marginal expenditure of a monopsony buyer is as follows: ME = P + (dP/dQ)Q P = factor's market price & Q = quantity of the factor sold a) Demonstrate that the marginal expenditure faced by the monoposonist is equal to: ME = P(1 + 1 / elasticity of supply) b) Show that the marginal expenditure on the good will always be greater than or equal to the price of the good c) Utilize the formula you derived to explain why, if the buyer's side were competitive, marginal expenditure would equal the market price d) Will the factor's market price be higher or lower under a monoposonist buyer than in a perfectly competitive market?arrow_forwardJoe's Flat Pretzels is a dominant employer of manufacturing labor in the town of Pretzelville, PA. Their demand for labor can be represented by W=24-Q where Q is measured in hundreds of hours. The supply curve of labor is W=4+0.25Q. Because Joe's Flat Pretzel has market power in the labor market, their Marginal Cost of Labor is MC=4+.5Q. How many units of labor will Joe's hire? At what wage? Provide a graph illustrating this situation.arrow_forwardThe employment of teaching assistants (TAs) by major universities can be characterized as a monopsony. Suppose the demand for TAs is W = 30,000-125Q, where W is the wage (as an annual salary) and n is the number of TAs hired. The supply of TAs is given by W = 1,100 + 75Q, and the marginal expenditure curve is ME = 1,100 + 150Q. a. If the university takes advantage of its monopsonist position, how many TAs will it hire? What wage will it pay? (Round your responses to two decimal places.) The university will hire TAs at a wage of $ per year.arrow_forward
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