Please answer ALL questions, draw a graph when/if it is related to the nature of the problem, and provide detailed explanations supporting your answers.

Wages and Employment in Competitive and Monopsonistic Labor Markets You may need to review the fundamental concepts of monopsonistic labor markets in your textbook: Chapter 16, pages The symbols Wc, Lc, WM, and LMrefer to the wages and labor in the competitive and monopsonistic labor markets. You are to consider the short-run effects in the specified labor market. Part A: Perfect Competition and Monopsony 1. Explain why the marginal revenue product Perfectly Competitive and Monopsonistic Labor Markets (MRP) curve is equal to the market demand (D) Competitive labor Monopsonistic labor market market curve for labor in the perfectly competitive labor MRC1 market. WAGE (W) X X 2. Explain why the MRP curve is not equal to the market D curve for labor in the monopsonistic MRP 1 labor market. LABOR (L) LABOR (L) 3. Why is the marginal resource cost (MRC) curve equal to the market labor supply (S) curve in the perfectly competitive labor market? 4. Why is the MRC curve not equal to the market labor S curve in the monopsonistic labor market? 5. In the appropriate graph, indicate by Wci and Lci, or WMi and LMI, the market wage and quantity of labor. Part B: Analyzing Changes in the Labor Market For each of the following scenarios, analyze the short-run effect of the specified event on each labor market. State whether the event increases, decreases, or does not change the market wage and labor. Be sure to shift the curves that are affected by the events, leading to the changes in wage and labor. . In the perfectly competitive labor market graph, indicate by Wai and Woz the market wage before and after the event. Indicate by Lai and Loz the equilibrium quantity of labor before and after the event In the monopsonistic labor market graph, indicate by WMI and WM2 the market wage before and after the event. Indicate by LMi and Liz the equilibrium quantity of labor before and after the event. 6. Event: New training methods increase the productivity of Competitive labor Monopsonistic labor market market workers in the automobile industry. (The graphs refer to the labor market for automobile workers.) WAGE (W ) XX. Competitive Monopsonistic labor market market LABOR (L) LABOR (L) MRC1 WAGE (W ) X. 7. Event: The U.S. government relaxes a tough immigration aw, WAGE (W) making it easier for construction workers from other countries to enter the United States. (The graphs refer to the American labor market for construction workers.) LABOR (L) LABOR (L) Competitive labor Monopsonistic labor market market MRCA 8. Event: The German government lowers tariffs on shoes imported into Germany. (The graphs refer to the labor market WAGE (W ) WAGE (W for shoe workers in Germany.) X Competitive labor Monopsonistic labor market market MRC1 LABOR (L) LABOR (L) S, = MRC, WAGE (W ) WAGE (W) X. 9. Event: Labor unions conduct a successful advertising campaign urging people to buy goods and services produced by D1 = MRP, American workers. (The graphs refer to the labor market for all American workers.) LABOR (L) LABOR (L) A Monopsonistic Labor Market Part C: Monopsony and a Minimum Wage MRC 10. What is the profit-maximizing amount of labor for this monopsonistic firm? Why? WAGE (W) $ $13.00 11. What wage will it pay each unit of labor? Why? $6.00 $5.00 12. If the government sets a minimum wage of $13.00, how many units of labor would be hired? 45 607080 95 150 LABOR (L) 13. How many units of labor will be unemployed with this minimum wage? Explain. 14. If the government sets a minimum wage of $6.00, how many units of labor would be hired? How many units of labor will be unemployed with this minimum wage? Explain