1. Suppose the tennis ball market is competitive and the market price for a three-pack of tennis balls is \$4.00. The

# 1. Suppose the tennis ball market is competitive and the market price for a three-pack of tennis balls is \$4.00. The

1. Suppose the tennis ball market is competitive and the market price for a three-pack of tennisballs is \$4.00. The production function of tennis balls is given by Q = 100L L , where Q is thequantity of three-packs per day and L is units of labor. The firm pays its workers a going-marketwage of \$80 per day. How many units of labor should the firm hire?a. 10b. 20c. 30d. 402. A monopolist faces an inverse demand curve given by P = 60 2Q. The monopolist hires workersin a competitive market at a wage = \$200. The monopolists production function is Q = 10L.How many units of labor should this firm hire?a. 1b. 2c. 3d. 43. In a competitive market, market labor supply conditions are given by W = 10,000L and marketlabor demand conditions are given by MRP =60,000 5,000L, where L is measured in thousands ofworkers. What is the equilibrium wage?a. \$10,000b. \$20,000c. \$30,000d. \$40,0004. Suppose that the labor supply is given by W = 25 + 5L and MRP = 100 5L. What is theequilibrium wage under conditions of monopsony?a. \$25b. \$50c. \$75d. \$1005. A monopsonist faces a labor supply curve with an elasticity of supply of 0.20. What is the LernerIndex for this firm as a measure of its monopsony power?a. 2.2b. 3.45c. 0.75d. 5.6. An economist estimates two regression equations using data on all MLB teams:(1) Wins = 10 + 0.01TB(2) Team Total Revenue = \$10,000,000 + \$2,000,000Winswhere Wins is the number of team wins and TB is the teams total bases. Total bases is a measure ofhitting performance and equals singles+ (2 x doubles) + (3 x triples) + (4 x home runs).What is the MRP for a player with 250 total bases?a. \$4 million.b. \$6.5 million.c. \$5 million.d. \$4.25 million. ?