Figure 19-2 -Refer to Figure 19-2. This Figure Depicts Labor Demand and Labor

question 171

Multiple Choice

Figure 19-2
-Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium is at $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then employment is

• A)500.
• B)600.
• C)700.
• D)800.

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Definitions:

Marginal Product

The rise in production resulting from one more unit of input, while keeping all other inputs unchanged.

Units of Output

The quantity of goods or services produced by a business, factory, or individual within a certain timeframe.

Value

Value refers to the importance, worth, or usefulness of something, often determined by its desirability, utility, or monetary worth.

Marginal Product of Labor

The additional output a firm produces as a result of hiring one more worker.