The Figure Given Below Represents Equilibrium in the Labor Market

question 24

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

-If a person is earning $80,000 per year as a dentist and could earn at most $45,000 per year doing something else, his transfer earnings are ____, whereas his economic rent is ____.

• A)$45,000, $35,000
• B)$80,000, $45,000
• C)$45,000, $80,000
• D)$80,000, $35,000
• E)$35,000, $45,000

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Definitions:

Full-time Work

Employment in which an individual works a minimum number of hours defined as such by their employer, typically involving a commitment of 35-40 hours per week.

Phased Retirement

An arrangement that allows employees to reduce their hours and/or responsibilities in order to ease into retirement.

Complete Cessation

A term referring to the total ending or discontinuation of a behavior or process.

Reduced Working Hours

A labor policy or arrangement where the standard number of hours worked by employees is decreased without a significant reduction in pay, aimed at improving work-life balance.