Question

Which of these describes a labor market in which most of a small town's workers are employed by one large company?

	A.	oligopoly
	B.	monopoly
	C.	monopolistic competition
	D.	monopsony

When a labor market is imperfect due to market power by a firm, the result in that market typically is:

	A.	more workers hired than in a competitive market, at a wage above their marginal value.
	B.	fewer workers hired at a wage above their marginal value.
	C.	more workers hired than in a competitive market, at a wage below their marginal value.
	D.	fewer workers hired at a wage below their marginal value.

Suppose Alcoa, Inc. is a monopsonist employer in the town of Alcoa, TN. Using the concept of marginal factor cost, each time Alcoa increases the number of workers it hires, it will:

	A.	pay a higher wage, resulting in an even higher marginal factor cost.
	B.	pay a lower wage, resulting in a lower marginal factor cost.
	C.	pay a higher wage, but lead to a lower marginal factor cost.
	D.	pay a lower wage, but lead to a higher marginal factor cost.

Which measurement rises most quickly as more labor is hired?

	A.	the supply of labor
	B.	the marginal revenue product of labor
	C.	the marginal factor cost of labor
	D.	the value of the marginal product of labor

Which financial instrument is strictly an IOU?

	A.	private equity capital
	B.	corporate bond
	C.	venture capital
	D.	a share of stock

Answer 1

Q1) option D).

In Monopsony, only single buyer exist, with large number of suppliers , so one large company employing people is monopsony

In monopoly , single seller & large number of consumers

In Monopolistic Competitive market, large number of small firms selling Differentiated product

In oligopoly, few large firms exist

Q2) option D)

In Monopsony, ( imperfect Competition model)

the eqm wage is below their Marginal valuation.

3) option D)

In Monopsony, eqm level of wage will be lower

But as MFC depends on number of labor units,so MFC will rise

4) option C)

MFC will rise

VMPL = P*MPL

MRPL = MR*MP

As more labor is hired, then MP falls, so these two measures fall

Q5) option B)

IOU is I owe you, an informal document , that acknowledge debt