Suppose That the Labor Supply Curve for a Large University

question 4

Multiple Choice

Suppose that the labor supply curve for a large university in a small town is given by w = 140 + 0.02L, 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 plus $40.
• B) is twice the wage rate.
• C) equals the wage rate plus $20.
• D) equals the wage rate.
• E) equals the wage rate plus $60.

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Definitions:

Length

The measurement of something from end to end or the extent of something along its greatest dimension.

X

Often used to represent an unknown quantity or variable in mathematical equations and expressions.

Markup Rate

The percentage increase on the cost price of goods to achieve the selling price.

Selling Price

The amount for which a product or service is sold to the purchaser.