Suppose That the Labor Supply Curve for a Large University

question 6

Multiple Choice

Suppose that the labor supply curve for a large university in a small town is given by w = 60 + 0.08L, where L is number of units of labor per week and w is the weekly wage paid per unit of labor. If the university is currently hiring 1,000 units of labor per week, the marginal cost of an additional unit of labor

• A) equals the wage rate.
• B) is twice the wage rate.
• C) equals the wage rate plus $160.
• D) equals the wage rate plus $80.
• E) equals the wage rate plus $240.

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