A monopolist union that desired to maximize its total wage bill (w l) would offer that quantity of labor for which:
a. labor's marginal productivity is zero.
b. labor's wage falls to zero.
c. the quantity of labor hired is as great as possible given the firm's demand curve.
d. the marginal revenue from providing one more worker to the market is zero.
QUESTION 2Which is NOT an example of moral hazard
a. people eat more at all-you-can-eat buffets
b. loggers select the most profitable trees to harvest even when they are not paying per tree felled
c. Drivers of heavier, safer cares are more likely to run stop signs
d. workers on commission work harder than those paid an hourly wage
QUESTION 3What is the cumulative effect of a simultaneous increase in area income of 5 percent and a 10 percent increase in prices at Urban General?
a. Quantity demanded at Urban General falls by 4 percent.
b. Quantity demanded at Urban General rises by 4 percent.
c. Quantity demanded at Urban General rises by 1 percent.
d. Quantity demanded at Urban General falls by 1 percent.
e. Quantity demanded at Urban General does not change.
QUESTION 4A price discriminating monopsonist could increase its profits by:
a. paying the minimum wages possible.
b. hiring as little capital as possible.
c. paying lower wages to workers with inelastic supply of labor curves than to workers with elastic curves.
d. paying lower wages to workers with elastic supply of labor curves than to workers with inelastic curves.
QUESTION 5Which is NOT an example of moral hazard
a. people eat less at all-you-can-eat buffets
b. loggers clear-cut a tract of land rather than when paying per tree felled
c. Drivers of heavier, safer cares are more likely to run stop signs
d. workers on commission work harder than those paid an hourly wage
QUESTION 6Area income increases by 20 percent.
a. Quantity demanded at Urban General does not change.
b. Quantity demanded at Urban General falls by 10.0 percent.
c. Quantity demanded at Urban General rises by 10.0 percent.
d. Quantity demanded at St.Elsewhere rises by 7.0 percent.
e. There is not enough information to tell what happens to quantity demanded at either hospital.
QUESTION 7For a monopsonistic hirer of labor, the gap between labor's marginal revenue product and its wage rate will be greater:
a. the more elastic the supply curve for labor.
b. the more inelastic the supply curve for labor.
c. the more elastic the firm's demand for labor.
d. the more inelastic the firm's demand for labor.
QUESTION 8A difference between moral hazard and adverse selection is that
a. moral hazard deals with pre-contractually determined public information
b. moral hazard deals with post-contractually determined private information
c. adverse selection deals with pre-contractually determined private information
d. adverse selection deals with post-contractually determined public information
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