Exhibit 27-11 ​

Multiple Choice

Exhibit 27-11
​

-Refer to Exhibit 27-11. The firm in the exhibit is a monopsony. We have deliberately not identified the three curves in the exhibit. They are simply curves 1, 2, and 3. If (union) collective bargaining with the monopsony guarantees the wage rate that workers will be paid is W₂, then how many more workers will the monopsony hire than it would hire if it could pay its chosen (or preferred) wage?

A) Q₄ - Q₁ more workers
B) Q₃ - Q₂ more workers
C) Q₂ - Q₁ more workers
D) Q₃ - Q₁ more workers
E) Q₄ - Q₃ more workers