The Figure Below Shows the Supply Curve for Labor

question 38

Multiple Choice

The figure below shows the supply curve for labor. Figure 15.1 Refer to Figure 15.1.When wage rate increases from W₃ to W₅:

• A)quantity of labor supplied increases from Q₁to Q₄.
• B)quantity of labor supplied decreases from Q₅ to Q₂.
• C)quantity of labor supplied increases from Q₂ to Q₄.
• D)quantity of labor supplied decreases from Q₄ to Q₂.
• E)quantity of labor supplied increases from Q₁ to Q5₄.

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Definitions:

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in the market.

Supply and Demand

The basic economic principle that determines the price of goods and services in a market, based on the quantity available (supply) and the desire of consumers to purchase (demand).

Demand Curve

A visual model that illustrates the link between the cost of a commodity and the volume of demand from buyers at those costs.

Secondary Market

A marketplace where investors buy and sell securities, such as stocks and bonds, from other investors rather than from issuing companies directly.