1. Discuss the favourable impact on resource allocation of setting a minimum wage at the intersection of theSandVMPschedules.
2. In what sense are resources allocated more efficiently at that point than at the monopsonist's equilibrium?
3. If the monopsonist followed a policy of perfect wage differentiation in the absence of the minimum wage, what would be the implications for resource allocation?
4. Compare the income distribution consequences of the two alternatives of minimum wages and perfect wage differentiation.