Explain the difference between competitiveand monopsonistic labor markets. How doesthe monopsonistic firm optimize its choice ofoptimal labor? [Hint: explain with diagrams]

Difference between Competitive labor market and Monopsonistic labor market Monopsonistic labor…

Answered: Explain the difference between…

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter26: Factor Markets: With Emphasis On The Labor Market

Section26.2: The Labor Market

Problem 1ST

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Given the labor demand function (9)-/+cq where I(9) is labor demanded, is the fixed cost of production and cis the constant marginal cost. Assume weg wf, • Derive p by maximizing profit. . If you are given that we are following Dixit Stiglitz's demand system how would you comment upon the economy of scope and the vanety produced?
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Consider a manufacturing firm in a labor market that isperfectly competitive. There are two kinds of workers: productiveworkers whose marginal revenue product is $48,000 per year, andlazy workers whose marginal revenue product is $40,000 per year. Itis difficult for the firm to differentiate between productive andlazy workers. A local college offers a new yearlong astronomy course. Althoughthe cost of tuition is the same for both types of workers, thepsychic cost of having to work hard and get a passing grade islower for productive workers because they are able to learn morequickly than lazy workers. Therefore, the cost of taking the class(including the cost of tuition as well as the psychic cost) is$5,000 per year for a productive worker and $10,000 per year for alazy worker. Because astronomy has little relevance tomanufacturing, taking the class does not increase or decrease aworker's productivity. The firm uses the class as a way to differentiate betweenproductive and lazy…
What is a monopsony? What distinguishes a monopsony from a competitive employer of inputs
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2
Equilibrium in the lobour market depends on the demand for labour and the supply of labour. Graphically demonstrate how the supply of labour in the US is affected by th eincrease in the labour force resulting from Mexican immigrants. What other factors tht can cause the labour supply curves to shift?
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Explain the difference between competitive and monopsonistic labor markets. How does the monopsonistic firm optimize its choice of optimal labor? [Hint: explain with diagrams]