The Figure Given Below Represents Equilibrium in the Labor Market

question 32

Multiple Choice

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor. Figure 14.6 In the figure,
D = MRP implies demand for labor = Marginal Revenue Product
MFC represents Marginal Factor Cost curve
S represents the supply curve of labor
According to Figure 14.6, if the government imposes a minimum wage of $15, what quantity of labor will a competitive firm and a monopsonist, respectively, hire?

• A)50 and 25
• B)50 and 75
• C)75 and 125
• D)125 and 250
• E)50 and 125

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Definitions:

Subsidy

A financial contribution by a government that confers a benefit on a specific industry or enterprise.

Government Financial Contribution

Financial support provided by the government to organizations, individuals, or sectors through grants, subsidies, or other fiscal measures.

Specific Industry

A distinct sector of the economy focused on a particular category of products or services.

Ratification

The formal approval of an agreement or act, making it officially valid.