1) In a price taking market, the marginal revenue product of the labour is equal to the wage rate but in a monopoly market, the monopolist will pay workers less than their marginal revenue product. Explain why the statement is false.
2)Suppose the wage rate per hour offered by the firm is $100. After an increase in the demand for the firm's product, producer decides to induce the workers to work more by paying a wage rate of $150 from the eighth hour onward. Draw the budget line of a worker with income on the y-axis and leisure on the x-axis. Will wokers necessarily work more?
