19.If the tiem employing labor under a monopsonist market condition, the wage rate an
labor employed would be, respectively.
A. Birr 14 and 300
C. Birr 14 and 400
D. Birr 13 and 300
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B. Birr 13 and 400 20. If the market for this labor characterizes with purely competitive, the wage rate and the quami
labor employed would be, respectively
A: Birr 14 and 300 B. Birr 13 and 400
C. Birr 14 and 400
D. Birr 13 and 300 Part III: Matching questions: Match Column 'A' with Column 'B'. (1 point each 10points)
Column A
1. Efficient allocation resources between alternative production of good x and good ye
2. Underutilization of fixed input
3 Over Utilization of variable input H
4 The competitive labor and product market
5. Membership representing mainly unskilled workers
from many occupations T
6 Competitive labor market and monopoly in product market-3
7. Monopsonist in labor market and competitive in product market
8. Monopsonist in labor market and Monopolist in product market A
9. Membership representing skilled workers from one occupation. F
10. Employees taking unauthorized work breaks p
Part IV: Short answer questions (2 pts)
A W<MRPL< VMPL
B. WMRPL-VMPL
C. VMPLX VMPLY
D. Shirking behavior
E. Stage 1 of Short run production
F. Craft unions
G. VMPLX> VMPLY
H. Stage III of Short run production 1. General unions
1. W MRPL(but < VMPL)
K. WMRPL(but= VMPL)-
L. Free rider problem
1. Explain the properties of total product (TP), Average product (AP) and Marginal pro of labor properties under the three stages of short run production
Stage 1: In stage 1 of short run production, total product (TP) increases at an increasing rate as more labor is employed. Average product (AP) also increases but at a decreasing rate, while marginal product of labor (MPL) is at its highest point and starts to decrease.
Stage 2: In stage 2 of short run production, total product (TP) continues to increase, but at a decreasing rate. Average product (AP) reaches its maximum value and starts to decline, while marginal product of labor (MPL) is still positive but decreasing.
Stage 3: In stage 3 of short run production, total product (TP) starts to decrease. Average product (AP) also decreases, while marginal product of labor (MPL) becomes negative.
2. W<MRPL< VMPL: This inequality indicates that the wage rate (W) is less than the marginal revenue product of labor (MRPL) but greater than the value of marginal product of labor (VMPL). This suggests that the firm is not maximizing its profits as MRPL should be equal to or greater than the wage rate.
4. The competitive labor and product market: This refers to a market condition where both the labor market and the product market are perfectly competitive. In this scenario, firms are price takers in both markets, and there is free entry and exit of firms and workers. Wages and product prices are determined by the forces of supply and demand.
6. Competitive labor market and monopoly in product market: This refers to a market condition where the labor market is competitive, but the product market is monopolistic. In this scenario, firms have market power in the product market and can set prices, while wages in the labor market are determined by the forces of supply and demand.
7. Monopsonist in labor market and competitive in product market: This refers to a market condition where the labor market is monopolistic (monopsony), but the product market is competitive. In this scenario, the single buyer of labor has market power and can influence wages, while firms in the product market are price takers.
8. Monopsonist in labor market and monopolist in product market: This refers to a market condition where both the labor market and the product market are monopolistic. In this scenario, the single buyer of labor and the single seller of the product have market power and can influence wages and product prices.
9. Membership representing skilled workers from one occupation: This refers to a labor union or organization that represents workers with specialized skills from a specific occupation. Craft unions are examples of this type of membership.
10. Employees taking unauthorized work breaks: This refers to shirking behavior, where employees take breaks or engage in activities not related to their work responsibilities without permission. This can lead to lower productivity and efficiency in the workplace.
L. Free rider problem: This refers to the issue where some individuals benefit from a collective action or public good without contributing to its provision. In a labor union context, it can refer to workers who benefit from the union's activities, such as negotiations for higher wages and better working conditions, without paying union dues or actively participating in union activities.
These are the properties and concepts related to short run production and labor market conditions.
The properties of Total Product (TP), Average Product (AP), and Marginal Product (MP) of labor vary depending on the three stages of short run production.
Stage I of Short Run Production:
- TP increases at an increasing rate as more units of labor are employed.
- AP increases but at a decreasing rate, as TP is divided by the number of units of labor.
- MP is positive and at its maximum since additional units of labor contribute significantly to increasing TP.
Stage II of Short Run Production:
- TP increases but at a decreasing rate as more units of labor are employed.
- AP reaches its maximum and starts to decline because TP is divided by a larger number of units of labor.
- MP is positive but decreasing, as each additional unit of labor contributes less to increasing TP.
Stage III of Short Run Production:
- TP increases at a decreasing rate, but eventually reaches a maximum and starts to decline.
- AP starts to decline since TP is divided by an increasing number of units of labor.
- MP becomes negative, as each additional unit of labor starts to decrease TP.
It's worth noting that the properties of TP, AP, and MP can vary depending on the specific production function and the specific inputs being used. The above explanation provides a general understanding of the properties under the three stages of short run production.