The Figures Given Below Show the Demand (D)and Supply (S)

question 82

Multiple Choice

The figures given below show the demand (D) and supply (S) curves of labor in two different markets. Figure 15.3
-Refer to Figure 15.3.If the wage rates in market A and market B were set at $15,then:

• A)there would be a shortage of workers in both markets.
• B)there would be a surplus of workers in both markets.
• C)there would be a shortage of workers in market A and a surplus of workers in market B.
• D)there would be a shortage of workers in market B and a surplus of workers in market A.
• E)the market as a whole would be in equilibrium.

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Definitions:

Value of Marginal Product

The additional revenue generated by employing one more unit of a factor of production, such as labor.

Marginal Product

The increase in output resulting from a one-unit increase in the input of a production factor, holding all other inputs constant.

Marginal Cost

The increase in total cost that arises from an extra unit of production.

Labor-supply Curve

A graphical representation showing the relationship between the quantity of labor supplied and the wage rate.