Economics Homework Help

Topic 6: for this topic we have a few different short sources that each touch on ideas of market power on the demand side of markets and its implications. (The other non-required readings for topic 7 focus primarily on market power on the supply side!) This will relate to our discussion of market power in Lecture 6, but also kick start our study of specific issues in labor market, which we will continue into Lecture 7 next week!

First read Janet Nguyen’s short article, then you can begin to explore one or two of the links mentioned in that piece, and/or move on to a couple of Marketplace podcast episodes from Reema Khrais and Krissy Clark.

– Monopsony: When there’s only one employer in town (Links to an external site.) by Janet Nguyen

– Do “superstar” companies hold down wages? (Links to an external site.) by Reema Khrais

– Answering your “History of Now” questions (Links to an external site.) by Krissy Clark

Some questions to guide your response (300-500 words):

1. What are some reasons why labor markets might not be competitive? Based on the economic theory, should that concern us?

2. To what extent do you think the issues raised in these sources are about the behavior of profit-driven firms in general, and to what extent do you think they’re about monopsony power in particular (that is, when there is one big employer that dominates a local labor market)?

3. What public policy questions or issues are raised by the issues you’ve learned about here? What are the competing interests among different groups of people that such public policy debates will have to weigh up against each other?