The Figure Below Shows the Supply Curve for Labor

question 11

Multiple Choice

The figure below shows the supply curve for labor.Figure 16.1

-The labor market is in equilibrium when:

• A)the demand curve lies above the supply curve.
• B)both demand and supply curves are positively sloped.
• C)both demand and supply curves are negatively sloped.
• D)the demand curve intersects the supply curve.
• E)the demand curve is negatively sloped but the supply curve is positively sloped.

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Definitions:

Price Elasticity of Demand

measures how much the quantity demanded of a good responds to a change in the price of that good, quantified as the percentage change in quantity demanded divided by the percentage change in price.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price, holding all else constant.

Linear Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded, where the curve is a straight line.

Maximizing Total Revenue

The process of adjusting prices and output to achieve the greatest possible sales income.