Suppose That the Demand for Labour Is Given by P

question 85

Multiple Choice

Suppose that the demand for labour is given by P = 30 - Q and the supply of labour is given by P =
2Q. Which of the following is not true if a minimum wage of 24 is imposed on the labour market?

• A)the dead weight loss will be 24.
• B)the dead weight loss will be 30.
• C)labour supply will be 12.
• D)labour demand will be 6.

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Definitions:

Interest Rate

The percentage of an amount of money which is charged for its use per a certain period, often annually, by a lender to a borrower.

Medium of Exchange

A medium of exchange is anything widely accepted as a form of payment, making trade easier by eliminating the need for a coincidence of wants.

Store of Value

An asset, commodity, or currency that can be saved, retrieved, and exchanged in the future without significantly losing value.

Holding Wealth

The act of owning, managing, and retaining assets or capital with the goal of increasing financial security and potential for future income.