Explain how the competitive labor market functioned

Reference no: EM13935151

1) Assume that a large firm buys all the farms in northern Florida and becomes the only employer of farm workers in the northern half of the state.

Explain how the competitive labor market functioned before the buyout of the independent farms. How was the wage rate and quantity of workers employed in the market determined?
What will happen to the wage rate and employment of farm workers after the industry becomes monopsonistic? Illustrate your answer with an appropriate graph.
What is MRC? Why is MRC a part of the monopsony graph and not a part of the perfectly competitive labor market graph?

2) The demand for the services of Trish's Computer services has increased. Trish employs several workers who diagnose and fix clients' computer problems. This increased demand has allowed Trish to raise her prices.

What will happen to the MRP and wages of Trish's workers?
The wage rate is W2; the old wage was W1. What is the economic rent Trish's workers now earn? Define economic rent.
What factors affect the elasticity of supply of the labor supply curve that Trish faces as she hires workers?

Draw, label and explain the Circular Flow Model (CFM). Include the following: firms, households, product market, and factor (or resource) market.
Who owns the productive resources? What are those resources? What payment does each type of resource earn?
Explain the two markets in the CFM and explain the roles that firms and household each play in the CFM.

Reference no: EM13935151

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