Practice Questions
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In a monopsony, which of the following best describes the market power of the single buyer in the factor market?
In a monopsony, there is only one buyer for workers. Other options are incorrect because Some might think a single buyer has no power; It's a common m...
How does the bargaining power of workers in a monopsony affect their wages compared to a competitive labor market?
In a monopsony, there is only one buyer for labor. Other options are incorrect because Some might think that fewer buyers means higher wages; It's a c...
In a monopsony, how does the buyer's market power affect the wages paid to workers compared to a competitive labor market?
In a monopsony, there is only one main buyer for labor. Other options are incorrect because Some might think that a strong buyer would pay more to att...
In a monopsony market, how does the bargaining power of the buyer affect the supply curve of the labor market?
In a monopsony, the buyer has a lot of power. Other options are incorrect because Some might think that more buyer power means higher wages; It's a co...
In a monopsony labor market, how does the wage determination process affect employment levels compared to a perfectly competitive labor market?
In a monopsony, there is only one big employer. Other options are incorrect because Some might think that fewer workers means higher wages; It's a com...
In a monopsony, which of the following best describes the market for labor?
In a monopsony, there is one main employer and many workers. Other options are incorrect because This option suggests many employers and one worker; T...
What characterizes a monopsony in factor markets?
A monopsony happens when there is only one buyer in the market. Other options are incorrect because This option suggests there are many buyers, which ...
In a monopsony labor market, what is the primary characteristic that distinguishes it from a competitive labor market?
In a monopsony, there is only one employer. Other options are incorrect because This answer suggests there are many employers; This option implies wor...
In a monopsony, how does the wage-setting behavior of the employer impact the labor supply and overall market efficiency?
In a monopsony, the employer has more power over wages. Other options are incorrect because This answer suggests the employer pays more, which is not ...
In a monopsony, how does the wage-setting process differ from a competitive labor market?
In a monopsony, there is only one buyer for labor. Other options are incorrect because Some might think that less competition means higher wages; It's...
In a monopsony, the employer has significant control over wages due to the lack of competition for labor. This leads to a situation where the wage set by the monopsonist is often _____ than the equilibrium wage found in a competitive labor market.
In a monopsony, there is only one main employer. Other options are incorrect because Some might think that a single employer would pay more to attract...
Factor markets are to labor as product markets are to what?
Factor markets deal with labor, which is a resource for making things. Other options are incorrect because This option confuses types of resources; Un...
Which of the following statements accurately describe factor markets and their characteristics? Select all that apply.
Other options are incorrect because This option confuses factor markets with product markets; A monopsony is when one buyer controls the market, but t...
A small town has only one major employer, a factory that hires all the available workers in the area. Recently, the factory announced a decrease in wages due to increased production costs. What is the most likely consequence of this wage decrease in the context of the factor market?
When wages go down, workers may not want to stay. Other options are incorrect because Some might think lower wages will attract more workers; It's a c...
If a monopsony increases wages for its workers, what is the most likely underlying cause of this change in the factor market?
The monopsony understands that paying higher wages can keep workers longer. Other options are incorrect because Some might think that higher demand fo...
A small town has only one major employer who hires most of the local workforce, setting wages lower than the competitive market rate. This scenario exemplifies which of the following categories in factor markets?
A monopsony is when there is only one buyer for many sellers. Other options are incorrect because Perfect competition means many buyers and sellers; A...
Master Factor Markets and Monopsonies
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