Assume that the labor supply curve is S(w)=2w-20 and the demand curve is D(w)=40-w. In case of a non-discriminating monopsony, the marginal cost is MCN(W)=W-10. Note that MCN is the marginal cost in terms of workers. What is the change in the number of workers in the non-discriminating monopsony compared to perfect discriminating monopsony? Multiple Choice 5 decrease in workers 10 decrease in workers 5 increase in workers 10 increase in workers

Assume that the labor supply curve is S(w)=2w-20 and the demand curve is D(w)=40-w. In case of a non-discriminating monopsony, the marginal cost is MCN(W)=W-10. Note that MCN is the marginal cost in terms of workers. What is the change in the number of workers in the non-discriminating monopsony compared to perfect discriminating monopsony? Multiple Choice 5 decrease in workers 10 decrease in workers 5 increase in workers 10 increase in workers

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A firm produces output via the function: Q = L - (L2/800), where Q is the output per week and L is the number of labor hours per week. The firm’s additional cost of hiring an extra hour of labor is about $30 per hour (wage plus fringe benefits). The firm faces the fixed selling price, P = $50. How much labor should the firm employ?
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You are a labor economist trying to evaluate whether the labor market for computer scientists is competitive or monopsonistic. Based on previous research, you know that the production function for computers depends only on labor input: Y = -0.5L^2 + 10L; where Y is the output of computers and L is the quantity of labor used. The price of a computer is p = 2. You also know that the labor supply, as a function of the wage, for computer scientists is the following, where w is the wage per unit of labor: L = -10 + w. a. Find the equilibrium wages and employment (wc; Lc) that would prevail if the market for computer scientists were competitive. [Remember that a competitive firm takes the wage as given : that is, it assumes that the quantity of workers that it hires has no effect on the price of the next worker. (Of course, the equilibrium wage must equate demand and supply)].
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