Suppose That the Market for Labor Is Initially in Equilibrium

question 164

Multiple Choice

Suppose that the market for labor is initially in equilibrium.An increase in the price of output will cause

• A) the equilibrium wage and the quantity of labor to both rise.
• B) the equilibrium wage and the quantity of labor to both fall.
• C) the equilibrium wage to rise and the quantity of labor to fall.
• D) the equilibrium wage to fall and the quantity of labor to rise.

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Definitions:

Underground Train

A railway system in which the trains run below the ground surface, usually in tunnels, especially in urban areas.

Asphyxiated

The state of being deprived of oxygen, leading to unconsciousness or death; suffocation.

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Relating to, using, or denoting a thing that symbolizes or stands for something else, especially in literature and art.

Literal

Pertaining to the exact meaning of words or text without interpretation or exaggeration.