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Anna Blajer-Goiębiewska M. Sc.

Microeconomics

7. MARKETS FOR FACTOR INPUTS

Exercise 1. The company produces chocolate bars. The cost of employment is being considered by the company. The graph represents the situation of the company in the market for a labour (factor input).

In the market for chocolate bars, there is a perfect competition / monopoly.

In the market for labour, there is a perfect competition / monpsony. In other words, in the market for labour the company is the perfect competitor/ monopsonist.

The amount of labour hired by a firm will be..........

The price for one unit of labour will be............m.u.

The total cost of the resource equals.........................m.u.

The amount of economic rent earned by labour equals........m.u.

The amount of transfer earnings equals.......m.u

Exercise 2. The Telephone & Telegraph is the only company in the market. The cost of employment is being considered by the company. The graph represents the situation of the company in the market for a labour (factor input).

In the market for chocolate bars, there is a perfect competition / monopoly.

In the market for labour, there is a perfect competition / monpsony. In other words, in the market for labour the company is the perfect competitor/ monopsonist.

The amount of labour hired by a firm will be..........

The price for one unit of labour will be............m.u.

The total cost of the resource equals.........................m.u.

The amount of economic rent earned by labour equals........m.u.

The amount of transfer earnings equals.......m.u

Exercise 3. The company produces light swords, so it employs high ąualificated technologists. The cost of employment is being considered by the company. The graph represents the situation of the company in the market for a labour (factor input).

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In the market for chocolate bars, there is a perfect competition / monopoly.

In the market for labour, there is a perfect competition / monpsony. In other words, in the market for labour the company is the perfect competitor/ monopsonist.

The amount of labour hired by a firm will be..........

The price for one unit of labour will be............m.u.

The total cost of the resource equals.........................m.u.

The amount of economic rent earned by labour equals........m.u.

The amount of transfer earnings equals.......m.u

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