The Following Figure Shows the Labor Demand Curve, LD₁, and Labor

question 207

Multiple Choice

The following figure shows the labor demand curve, LD₁, and labor supply curve, LS₁, in a market. A month later, the labor demand curve shifts to LD₂.

-Refer to the figure above.What are the equilibrium employment and the wage rate after the demand curve shifts to LD₂?

• A) 15 units of labor and $20
• B) 20 units of labor and $35
• C) 5 units of labor and $15
• D) 10 units of labor and $10

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Definitions:

Principal

A main party to a transaction, such as the owner of a business or the party who has authorized an agent to act on their behalf.

Interest

The cost of borrowing money, typically expressed as a percentage of the principal, paid by the borrower to the lender for the use of their money.

Nonnegotiable Instrument

A financial document or contract that cannot be transferred or assigned to another party as easily as a negotiable instrument.

Mortgage

A secured loan agreement where the borrower pledges real property to the lender as collateral for the loan, which becomes void upon payment in full.