Question

1.

The wage paid to workers is ________ than marginal revenue product and _______ than marginal resource cost for a monopsonist in equilibrium.

		less; less
		less; greater
		greater; less
		greater; greater

2.

Farmer A and B share a farm and are equally good at their job; however, Farmer B does not like to wake up early, the long hours, or working in bad weather. Fortunately, Farmer A does not mind these drawbacks. The $50,000 annual salary is just enough to retain Farmer B. What can be concluded about what Farmer A is earning?

		Differential rent
		Inframarginal rent
		Agricultural subsistence rent
		Pure economic rent

Answer 1

1.A) less ,less

The wage paid to workers is less than marginal revenue product and less than marginal resource cost for a monopsonist in equilibrium.

2.D) Pure Economic rent

This is pure Economic rent . giving $ 50000 annual salary to B is fixed amount which is given by one owner of land to another owner of land.