Ch. 5 Monopolies

Question 0

A labor market monopolist

Answer 0

A firm that is the only buyer of labor in its labor market

-coal mine in an isolated small town, pineapple plantation on a tiny Hawaiian island

-upward sloping market labor supply curve
Can’t get workers at the going wage from competing mines because there aren’t any
It will have to increase wages to 1) attract the miners who must move in from out of town 2) attract workers from other occupations whose preferences were such that, at the old lower mining wage, they preferred to work at a less dangerous or dirty job 3) induce people currently out of the labor force to seek paid employment

Question 1

Economists describe the presence of upward-sloping labor supply curves to individual employers as creating monopolistic conditions in the…?

Answer 1

Labor market

Question 2

When mobility costs impede workers entry/exit from various places of employment

We call this type of labor markets…?

Employees find it costly to change jobs

Apples to labor markets that have many employers in them

Answer 2

Monopsonistic

Question 3

When will hiring stop?

Answer 3

When marginal revenue product equals marginal expense

Question 4

In a monopoly does employment decrease more in the long or short run?

Answer 4

Long run

Substituting capital for labor

If a monopolist is minimizing its costs of production and its ME(L) is increased, it will want to restore equality

Question 5

Any shift in the supply of labor curve that increases the marginal expenses of labor will..?

Answer 5

Reduce employment