1. Suppose the only local employer of graduate student teaching assistants (TAs) is your University. In this case what could we say about the probable relationship between themarginal revenue product (MRP) and Wage of TAs.
  1. the University will hire TAs until the cost of hiring the last TA = MRP, which means TAs will earn a wage higher than the MRP.
  2. the University will hire TAs until the cost of hiring the last TA = MRP, which means TAs will earn a wage lower than their MRP.
  3. the University will hire TAs until the cost of hiring the last TA = MRP, which means TAs will earn a wage = MRP.
  4. the University will hire TAs until the cost of hiring the last TA equals the wage rate.
  5. since the university is a monopsonist, it will find that the marginal cost of hiring a TA is below the wage rate and so they will earn more than their MRP.

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