Table 4-4 Table 4-4 Shows the Demand and Supply Schedules

question 149

Multiple Choice

Table 4-4
Table 4-4 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-4.Suppose that the quantity of labor supplied increases by 40,000 at each wage level.What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?

• A)W = $9.00; Q = 410,000
• B)W = $9.50; Q = 420,000
• C)W = $8.50; Q = 400,000
• D)W = $8.00; Q = 390,000

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Definitions:

Fed

Short for the Federal Reserve, which is the central banking system of the United States, responsible for monetary policy.

Business Investment

The act of allocating resources, usually in the form of capital, to create, expand, or improve a business's assets.

Required Reserves

The minimum amount of funds that a bank or depository institution must hold in reserve against specified deposit liabilities.

Excess Reserves

are the funds that banks hold over and above the required minimum reserves mandated by the central bank.