The marginal factor cost for a monopsonist is:

The marginal factor cost for a monopsonist is:
 a. equal to the market wage rate.
  b. above the market wage rate.
  c. below the market wage rate.
  d. affected by the fact that workers are less willing to work than under conditions of perfect competition.
  e. lower than the marginal revenue product of labor in equilibrium.

QUESTION 2

If policy makers estimate the natural rate of unemployment incorrectly, _____.
 a. their policies will cause deflation in the long run
 b. their policies will cause even more unemployment in the long run
 c. the economy will stay below its potential GDP in the long run
 d. the economy will tend toward the level of unemployment the policy makers believe is correct
  e. policies that appear to be successful in the short run will lead to further economic problems

QUESTION 3

Gross domestic product (GDP) is not a perfect measure of welfare because it:
 a. treats a dollar spent on guns the same as a dollar spent on education.
  b. treats a dollar spent on exports the same as a dollar spent on imports.
  c. double counts the value of leisure time.
 d. double counts depreciation.
 e. counts illegal activities in the underground economy.

QUESTION 4

Which of the following is not true about a monopsonist?
 a. It can set the wage rate and hire any desired number of workers at that wage.
  b. It is the only buyer of labor in a market.
  c. It usually extracts rents from its monopsony power.
  d. It determines the optimal employment-wage rate combination by equating the marginal revenue product of labor to the marginal cost of labor.
  e. It usually has to bargain with unionized workers.

QUESTION 5

The natural rate of unemployment is:
 a. equal to the seasonal unemployment.
 b. usually equal to 3 percent.
 c. the unemployment rate when none of the work force is unemployed for more than six weeks.
  d. the unemployment rate at which the economy is producing its potential GDP.
 e. defined by the government.