Question

15. When a union bargains successfully with employers, in that industry, 3. both the quantity of labor supplied and the quantity of Inbor demanded increase b. both the quantity of labor supplied and the quantity of labor demanded decrease. c. the quantity of labor supplied increases and the quantity of labor demanded decreases d. the quantity of labor demanded increases and the quantity of labor supplied decreases 16. Efficiency wages a. create a shortage of labor, and so reduce unemployment. b. create a shortage of labor, and so raise unemployment. c. create a surplus of labor, and so reduce unemployment. d. create a surplus of labor, and so raise unemployment. 17. Refer to the above Figure. At the equilibrium wage, how many workers are unemployed? a 0 b. 4000 c. 5000 d. 8000 18. Refer to Figure. If the government imposes a minimum wage of 4 pounds, then unemployment will increase by a. 0 workers. b. 2000 workers. c. 4000 workers. d. 5000 workers

Answer 1

15) c

Quantity of labor supplied increases and the quantity of labor demanded decreases.

16) d

Create a surplus of labor and so raise unemployment

17) c

Equilibrium occurs at the intersection of D and S.

18) a

Minimum wage of 4 is not binding as it is below the equilibrium wage rate.