Labor Economics Fall 2023, Problem Set 4 1 True/False/Uncertain Explain in 2-4 sentences. Points will be awarded for quality of explanation. If the statement 1s incorrect, attempt to correct it. Be specific where possible. 1. In a perfectly competitive labor market, a binding minimum wage will always impose efficiency costs in the labor market (i.e. increase deadweight loss), as some workers will lose their job. 2. In imperfect competition, the workers' wage will be the opportunity cost of their time plus the equilibrium rent. 3. Firms that hire minimum wage workers will reduce their capital investment if the minimum wage goes up. 2 Labor Demand with Monopoly Product Markets 1. Augment the competitive market firm's optimization problem to allow the price of the product to decrease with the quantity of output produced, so p = p(q) and p'(q) Derive 1 i 2 Labor Demand with Monopoly Product Markets 1. Augment the competitive market firm's optimization problem to allow the price of the product to decrease with the quantity of output produced, so p = p() and p'(q)