Labour Market Imperfections

A monopsonist is a single buyer of labor in a market.

True

False

The introduction of a trade union in a monopsony market can increase employment.

True

False

In a monopsony labor market, the workers have the power to determine the quantity of labor and the wage rate.

True

False

Fill in the missing word

In a bilateral monopoly, the trade union acts as the seller of labor.

Trade unions are associations of employers that aim to protect the interests of employers and negotiate with workers on a collective basis.

True

False

What is the role of trade unions in a labor market?

Fill in the missing word

The monopsonist employer will employ workers than the equilibrium in a perfectly competitive labour market.

What is one of the key roles of trade unions?

Fill in the missing word

A monopsonist is a single of labour.

What does a monopsonist represent in a labour market?

What is a bilateral monopoly in the context of labour market?

A bilateral monopoly occurs when there is a single buyer of labour but multiple sellers.
A bilateral monopoly occurs when there is a single seller of labour (trade union) and a single buyer (monopsonist).
A bilateral monopoly occurs when there are multiple sellers and buyers of labour.
A bilateral monopoly occurs when there is a single seller of labour but multiple buyers.

What are the implications of having a monopsony labour market?

They will employ fewer workers than the equilibrium in a perfectly competitive labour market and they will pay those workers at a lower wage than would be the case in competitive labour markets.
They will employ more workers than the equilibrium in a perfectly competitive labour market and they will pay those workers at a higher wage than would be the case in competitive labour markets.
They will employ the same number of workers as in a perfectly competitive labour market and they will pay those workers at the same wage as in competitive labour markets.
They will employ fewer workers than the equilibrium in a perfectly competitive labour market but they will pay those workers at a higher wage than would be the case in competitive labour markets.

What is the outcome when a powerful union and a monopsony employer are introduced into an industry?

It forms a bilateral duopoly, with the trade union and the monopsonist both having equal control over the labour market.
It forms a unilateral monopoly, with either the trade union or the monopsonist having complete control over the labour market.
It forms a bilateral oligopoly, with the trade union and the monopsonist both having limited control over the labour market.
It forms a bilateral monopoly, with the trade union as the sole seller of labour and the monopsonist as the sole buyer.

What could be the potential impact of a trade union in a monopsony market?

It can increase wages, increase monopsony power, decrease employment, and increase income inequality.
It can decrease wages, increase monopsony power, decrease employment, and increase income inequality.
It can increase wages, counterbalance monopsony power, increase employment, and reduce income inequality.
It can decrease wages, decrease monopsony power, decrease employment, and increase income inequality.

What happens when a trade union negotiates higher wages in a competitive labour market?

The quantity of labour demanded rises, the quantity of labour supplied falls, and unemployment decreases due to a surplus of demand for labour over the supply of labour.
The quantity of labour demanded and the quantity of labour supplied both remain unchanged, and there is no impact on unemployment.
The quantity of labour demanded and the quantity of labour supplied both rise, and unemployment decreases due to a surplus of demand for labour over the supply of labour.
The quantity of labour demanded falls, the quantity of labour supplied rises, and unemployment may increase due to a surplus of supply of labour over the demand for labour.

Question: 1 of 15 questions