Suppose the Market for Labor Is Perfectly Competitive and the Demand

question 4

Multiple Choice

Suppose the market for labor is perfectly competitive and the demand for labor is $L = 100 - 10 w$ and market supply is $L = - 20 + 10 w$ .If a minimum wage is imposed at w = 8,the total unemployed ( $L _ { S } - L _ { D }$ ) will be

• A)20
• B)40
• C)60
• D)80

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Definitions:

Base Year

A specific year against which economic or financial data is compared to assess changes or growth over time.

Current Year

The ongoing or present calendar year.

WARP

The Weak Axiom of Revealed Preference (WARP) is a criterion used to check for consistency in consumer choice behavior under the assumption of rationality.

Bundle

A set of goods or services sold together as a single package.