/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q7E Question: The only legal employe... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 14: Q7E (page 543)

Question: The only legal employer of military soldiers in the United States is the federal government. If the government uses its knowledge of its monopsonistic position, what criteria will it employ when determining how many soldiers to recruit? What happens if a mandatory draft is implemented?

Short Answer

Expert verified

The federal government will hire soldiers till the marginal value of the last soldier is equal to the payment made to them. After the draft is implemented, wages for volunteer soldiers will fall.

Step by step solution

01

Explanation

The federal government in the United States behaves as a monopsonist; it will hire soldiers till the marginal value of the last soldier is equal to the payment made to the last soldier. The monopsony power of the government will lead to hiring fewer soldiers and paying less to the soldier.

After the mandatory draft is implemented, the soldier with less expertise will be employed, and the volunteer soldiers will be paid less, as the wages of the draftees can be low enough. Hence, the number of soldiers hired will increase than the volunteer system.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

The only legal employer of military soldiers in the United States is the federal government. If the government uses its knowledge of its monopsonistic position, what criteria will it employ when determining how many soldiers to recruit? What happens if a mandatory draft is implemented?

The demand for labor by an industry is given by the curve L = 1200 - 10w, where L is the labor demanded per day and w is the wage rate. The supply curve is given by L = 20w. What is the equilibrium wage rate and quantity of labor hired? What is the economic rent earned by workers?

Using the same information as in Exercise 8, suppose now that the only labor available is controlled by a monopolistic labor union that wishes to maximize the rent earned by union members. What will be the quantity of labor employed and the wage rate? How does your answer compare with your answer to Exercise 8? Discuss. (Hint: The union鈥檚 marginal revenue curve is given by MR = 120 - 0.2L.)

You are offered the choice of two payment streams: (a) \(150 paid one year from now and \)150 paid two years from now; (b) \(130 paid one year from now and \)160 paid two years from now. Which payment stream would you prefer if the interest rate is 5 percent? If it is 15 percent?

Question: Suppose there are two groups of workers, unionized and nonunionized. Congress passes a law that requires all workers to join the union. What do you expect to happen to the wage rates of formerly nonunionized workers? Of those workers who were originally unionized? What have you assumed about the union鈥檚 behavior?
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.