The Labor Supply Curve Is Given by the Equation L_S

question 37

Multiple Choice

The labor supply curve is given by the equation L_S = 3W + 20 and the labor demand curve is given by the equation L_D = 80 − 2W. If the wage is $20, there will be a _________ of _________ workers.

• A) surplus; 80
• B) shortage; 40
• C) shortage; 80
• D) surplus; 40
• E) surplus; 20

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Definitions:

Rate-Of-Return Regulation

Maximum price allowed by a regulatory agency is based on the (expected) rate of return that a firm will earn.

Economic Efficiency

A state where resources are optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Monopolist

An individual or entity that has the exclusive control or possession of the supply or trade in a commodity or service, allowing them to manipulate the market.

Selling Price

Selling price is the amount of money that a seller is willing to accept in exchange for a good or service it provides to buyers.