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Discussion And Practice Worksheet

Provide an answer to the discussion below and complete the two pdf worksheets attached. Thank you.

Discussion Question:

If you were a business owner, what factors would you personally consider when deciding on whether or not you should hire another worker for your business?  

Putting our “economics hats” back on, how do these factors you mentioned above relate to the MRP = MRC rule for the labor market?  Why would it be disadvantageous for a firm to hire a given number of workers where MRP is greater than MRC, or where MRC is greater than MRP?

Next, compare and contrast each of the following categories with a perfectly competitive labor market and a monopsony:

Number of firms hiring labor

Size of firm(s)

Wage rate paid to employees

Supply curve of labor

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