A.   because a firm has customers that demand the goods and services that they produce.

B.   because of the downward sloping nature of the demand curve.

C.   because the firm wants to provide jobs and wealth for the community in which they operate.

D.   because a firm doesn't have customers that demand the goods and services that they produce.

A.   TRUE

B.   FALSE

A.   FALSE

B.   TRUE

A.   FALSE

B.   TRUE

A.   P=Q

B.   P=MRP

C.   MFC=P

D.   MRP=MFC.

A.   Yes, due to the fact that MRP<MFC. The firm should hire up to the point where MRP=MFC.

B.   Yes, because they will increase profits by firing workers.

C.   No, due to the fact that MRP>MFC. The firm should hire up to the point where MRP=MFC.

D.   Yes, due to the fact that MRP=MFC. The firm should hire up to the point where MRP=MFC.

A.   No, the firm should hire exactly 8 workers because at that point MRP=MFC; which is the profit maximizing level of labor hired.

B.   No, the firm should hire exactly 8 workers because at that point MRP>MFC; which is the profit maximizing level of labor hired.

C.   Yes, due to the fact MRP>MFC. Therefore, a firm can maximize profits by hiring additional workers.

D.   Yes, due to the fact MFC=MRP. Therefore profits can be increased by hiring additional workers.

A.   predicts that wages will decrease.

B.   predicts that employment will increase.

C.   predicts that unemployment will ensue.

D.   predicts that GDP growth will increase.

A.   MFC=MRP.

B.   profits are increasing.

C.   P=MFC.

D.   MRP>MFC.

A.   is perfectly elastic and horizontal.

B.   is perfectly elastic and upward sloping.

C.   is perfectly inelstic and vertical.

D.   is perfectly elastic and downward sloping.

A.   because the firm is a price setter and has an impact on the prevailing wage. Therefore, the firm can hire any number of workers, which will impact the prevailing wage. Thus, the wage does not equal MFC.

B.   because the firm is a price taker and has no impact on the prevailing wage. Therefore, the firm can hire any number of workers without impacting the prevailing wage.  Thus, the wage equals MFC.

C.   because wages will have to increase if the firm wants to hire addtional workers.

D.   because the firm is a price setter and has impact on the prevailing wage. Therefore, the firm can hire any number of workers, which will impact the prevailing wage. Thus, the wage does not equal MFC.

A.   is unrelated to the labor supply curve. This is due to the fact that the firm is the sole employer in this market.

B.   s the labor supply curve. This is due to the fact that the monopsonist is the labor market.

C.   lies below the labor supply curve. This is because a monopsonist will not only have to increase wages to hire the marginal, or last worker hired, but all workers employed.

D.   lies above the labor supply curve. This is because a monopsonist will not only have to increase wages to hire the marginal, or last worker hired, but all workers employed.

A.   may be greater than, less than, or equal to that in a perfectly competitive labor market, depending on labor supply.

B.   is greater than that in a perfectly competitive labor market.

C.   is less than that in a perfectly competitive labor market.

D.   is the same as that in a perfectly competitive labor market.

A.   more workers than a firm operating in a perfectly competitive labor market.

B.   the same number of workers as a firm operating in a perfectly competitive labor market.

C.   fewer workers than a firm operating in a perfectly competitive labor market.

D.   an indeterminate number of workers.

A.   is greater than MFC.

B.   is less than MFC.

C.   is above MFC.

D.   equals MFC.