REVIEW QUESTIONS
- Table 13.17 shows levels of employment (Labor), the marginal product at each of those levels, and a monopoly’s marginal revenue.
Table 13.17 Labor
Marginal Product of Labor
Price of the Product
1
10
$10
2
8
$7
3
7
$5
4
5
$4
5
3
$2
6
1
$1
- What is the monopoly’s marginal revenue product at each level of employment?
- If the monopoly operates in a perfectly competitive labor market where the going market wage is $20, what is the firm’s profit maximizing level of employment?
- Do unions typically oppose new technology out of a fear that it will reduce the number of union jobs? Why or why not?
- Compared with the share of workers in most other high-income countries, is the share of U.S. workers whose wages are determined by union bargaining higher or lower? Why or why not?
- Are firms with a high percentage of union employees more likely to go bankrupt because of the higher wages that they pay? Why or why not?
- Do countries with a higher percentage of unionized workers usually have less growth in productivity because of strikes and other disruptions caused by the unions? Why or why not?
- Are households demanders or suppliers in the goods market? Are firms demanders or suppliers in the goods market? What about the labor market and the financial market?
- Name some factors that can cause a shift in the demand curve in labor markets.
- Name some factors that can cause a shift in the supply curve in labor markets.