Table 4-7 Table 4-7 Shows the Demand and Supply Schedules

question 157

Multiple Choice

Table 4-7
Table 4-7 shows the demand and supply schedules for the labor market in the city of Pixley.
-Refer to Table 4-7. If a minimum wage of $12.50 is mandated, there will be a

• A) shortage of 40,000 units of labor.
• B) surplus of 40,000 units of labor.
• C) shortage of 80,000 units of labor.
• D) surplus of 80,000 units of labor.

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Definitions:

Wage Rate

The amount of compensation a worker receives per unit of time (e.g., hour, day) or per task completed.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production.

Purely Competitive

A market structure characterized by many sellers offering identical products, leading to a high degree of competition.

Purely Competitive

A market structure characterized by many buyers and sellers, with all firms selling identical products and no single buyer or seller able to influence the market price.