review test submission_ quiz 4 – emic2714 bfn on.pdf

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5/8/2016 Review Test Submission: Quiz 4 – EMIC2714 BFN ON

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Online tests Review Test Submission: Quiz 4H

Review Test Submission: Quiz 4

User Mpho Mothusi

Course EMIC2714 BFN ON

Test Quiz 4

Started 5/1/16 8:29 PM

Submitted 5/8/16 11:13 PM

Due Date 5/8/16 11:59 PMStatus Completed

Attempt Score 17 out of 20 points

Time Elapsed 170 hours, 44 minutes

ResultsDisplayed

All Answers, Submitted Answers, Correct Answers, Feedback, Incorrectly AnsweredQuestions

Question 1

For a monopsonist, the marginal factor cost curve will be above the supply of labour curve. The marginal factor cost curve is above the supply curve because

Selected Answer: the monopsonist will have to pay all workers a higher wage rate than the

current wage rate if it wants to hire more workers.

Answers: the monopsonist will t ake advantage of labour and offer them lower wages.

in order for the monopsonist to sell an additional unit of the good, the priceof the good must be lowered.

in order for the monopsonist to hire more labour the monopsonist must alsopurchase more capital.

the monopsonist will have to pay all workers a higher wage rate than thecurrent wage rate if it wants to hire more workers.

Question 2

The optimal level of employment for a monopsonist is set at the point where the

Selected Answer: marginal factor cost equal to the MRPL.

Answers: wage rate equals the VMPL.

wage rate equals the marginal factor cost.

marginal factor cost equal to the MRPL.

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Mpho Mothusi

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supply of labour equals the marginal factor cost.

Question 3

In a monopsonistic market,

Selected

Answer: both employment and wages are lower than in a comparablecompetitive market.

Answers: employment is lower but wages are higher than in a comparablecompetitive market.

employment is higher but wages are lower than in a comparablecompetitive market.

both employment and wages are higher than in a comparablecompetitive market.

both employment and wages are lower than in a comparablecompetitive market.

Question 4

Private ownership of a monopoly may benefit society because the monopoly will havean incentive to

Selected Answer:

lower its costs to earn a higher profit.

Answers: charge a price that is consistent with that of a benevolent socialplanner.

charge a price that prevents some people from buying.

price its good according to the intersection of marginal cost andaverage revenue.

lower its costs to earn a higher profit.

Question 5

If the substitution effect is always greater than the income effect, then an individual'slabour supply curve will

Selected Answer: always have a positive slope

Answers: bend backward

always have a positive slope

always have a negative slope

be vertical

be horizontal

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Question 6

A tax may be used as a corrective device in the case of a negative externality becauseit will __________ marginal private costs and __________ supply.

Selected Answer: increase; decrease

Answers: increase; decrease

increase; increase

decrease; decrease

decrease; increase

Question 7

All of the following statements regarding the marginal revenue product (MRP) curve and

the demand for labour are true EXCEPTSelected

Answer: an increase in the market demand for a given product decreases theproduct's price.

Answers: an individual firm's demand for labour is its MRP curve.

under conditions of perfect competition, MRP equals marginal physicalproduct multiplied by the product's price.

an increase in the market demand for a given product decreases theproduct's price.

the demand for labour is a derived demand.

Question 8

An increase in the wage rate has an income effect, which results in ____ consumptionof leisure, and a substitution effect, which results in ____ consumption of leisure.

Selected Answer: increased; reduced

Answers: reduced; reduced

reduced; increased

unchanged; reduced

increased; reduced

increased; increased

Question 9

If the labour-supply curve is almost vertical, this suggests that the substitution effect

Selected Answer: is in the same direction as the income effect.

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Answers: dominates the income effect.

is roughly offset by the income effect.

is dominated by the income effect.

is negligible, leaving only an income effect.

is in the same direction as the income effect.

Question 10

Refer to Exhibit 11. In the absence of collective bargaining, what quantity of labour would the profit-maximizing monoposonist hire?

Selected Answer: Q3

Answers: Q1

Q2

Q3

Q4

Q5

Question 11

When the price of the firm's product increases, the demand curve for labour for a profit-

maximizing firm operating in a competitive market will

Selected Answer: become steeper.

Answers: shift to the left.

shift to the right.

become flatter.

become steeper.

be unaffected.

Question 12

Refer to Exhibit 3. If a negative externality exists, then the external costs associatedwith the negative externality equal

Selected Answer: P3 - P1.

Answers: P3 - P1.

P4 - P3.

P3 - P2.

P2 - P1.

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Question 13

Under monopsony, the wage rate

Selected Answer: is less than the marginal revenue product of labour.

Answers: equals the marginal product of labour.

equals the marginal revenue product of labour.

is less than the marginal revenue product of labour.

is greater than it would be under perfect competition.

Question 14

MPL multiplied by PX is the ________ while the wage rate is the ________, where L

denotes labour and X denotes output.Selected

Answer: value of labour's marginal product; cost of a marginal unit of labour

Answers: cost of a marginal unit of labour; value of labour's marginal product

value of labour's marginal product; cost of a marginal unit of labour

marginal revenue of a unit of output; marginal cost of a unit of output

marginal cost of a unit of output; marginal revenue of a unit of output

Question 15

The substitution effect of an increase in the wage rate on the quantity of leisuredemanded

Selected Answer:

Makes leisure more expensive which leads people to work more

Answers: Makes leisure more expensive which leads people to work more

Makes leisure less expensive which causes people to work less

Gives people more purchasing power and causes people to demandmore leisure

Gives people less purchasing power and so they will demand lessleisure

Question 16

If a production process creates positive externalities, a competitive market produces toofew positive externalities because the producer

Selected Answer: does not pay all the costs of the externalities.

Answers: does not pay all the costs of the externalities.

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does not receive compensation for the externalities.

Both A and B.

None of the above.

Question 17

A monopsonist ic firm, as compared to a perfectly competitive firm, pays __________ wage and hires __________ labour.

Selected Answer: a lower; less

Answers: a higher; less

a higher; more

a lower; less

a lower; more

the same; the same amount of

Question 18

The monopsonist will employ labour to the point at which the

Selected Answer: marginal factor cost equals the marginal revenue product of labour.

Answers:

marginal factor cost equals the marginal revenue product of labour.

marginal revenue product equals the wage rate.

marginal cost of output equals the marginal revenue.

demand equals the supply of labour.

Question 19

A Pigouvian subsidy leads to a socially efficient outcome by ________.

Selected Answer: raising individuals' marginal benefit from consumption

Answers: raising individuals' marginal benefit from consumption

lowering the marginal private cost of production

raising the marginal external benefit from consumption

lowering the marginal external cost of production

Question 20

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Sunday, May 8, 2016 11:14:00 PM CAT

The best number of workers for any employer to hire is that quantity in which:

Selected Answer: the marginal revenue product equals the marginal factor cost.

Answers: the marginal revenue product equals the marginal factor cost.

the marginal revenue product exceeds the marginal factor cost.

total costs are minimized.

total revenue is maximized.

none of these

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review test submission_ quiz 4 – emic2714 bfn on.pdf

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