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

question 36

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: 15.2 According to Figure 15.2, assume that the market is in an initial equilibrium in which the labor supply is S₁ and the labor demand is D₁.Then labor supply shifts from S₁ to S₂ but the wage remains at its previous equilibrium level.Which of the following is true?

• A)The economy is still in equilibrium.
• B)There is a shortage of 20 workers.
• C)There is a shortage of 30 workers.
• D)There is a surplus of 30 workers.
• E)There is a surplus of 20 workers.

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Definitions:

Variables

Characteristics or conditions that can change and potentially affect the outcome of a study or experiment.

Interrelationships

The way in which two or more concepts, objects, or people are connected and affect each other.

Discriminant Validity

The degree to which a measure does not associate too strongly with measures from which it is supposed to differ.

Correlation Coefficient

A statistical measure that quantifies the degree to which two variables vary together; it ranges from -1 to 1, indicating the strength and direction of the relationship.