The Figure Given Below Shows the Demand Curves (D₁ and D₂)and

question 114

Multiple Choice

The figure given below shows the demand curves (D₁ and D₂) and supply curves (S₁ and S₂) of labor in the labor market. Figure: 29.2 Refer to Figure 29.2.At the initial equilibrium (when demand is D₁ and supply is S₁) , the wage rate and labor employment are:

• A)$7 and 20 laborers.
• B)$8 and 30 laborers.
• C)$6 and 50 laborers.
• D)$5 and 20 laborers.
• E)$5 and 10 laborers.

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Definitions:

Labor

The utilization of human physical and intellectual capacities in the generation of goods and services.

Plausible

Seeming reasonable or probable under the circumstances.

Production Function

A mathematical model that describes the relationship between inputs used in production and the resultant output.

Maximum Output

The highest amount of production that a company can achieve within a given period with the available resources.