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Unformatted text preview: choice diagram. (10 marks) 2. In a carefully labeled diagram, illustrate the wage and employment decision of a firm that is both a monopolist in the product market and a monopsonist in the labour market. (20 marks) 3. Consider two firms. In one firm, the technology is such that it is relatively difficult to substitute labour for capital and vice versa. In another firm, this is easy. Which firm has the more elastic labour demand curve in the long-run? Explain with reference to a carefully labeled diagram. (20 marks) 4. A monopolist hires fewer workers than a competitive firm because it produces less output than a competitive firm. True, false or uncertain. Explain with reference to a carefully labeled diagram. (20 marks)...
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- Fall '07