8. (3.0 pts) (A-2) Refer to Figure 7-1. If the real hourly wage rate was S6, wha

Question

8. (3.0 pts) (A-2) Refer to Figure 7-1. If the real hourly wage rate was S6, what would be the effect? a. There would be a shortage of 40 million workers and the wage rate would rise. b. There would be a shortage of 20 million workers and the wage rate would rise. c. There would be a surplus of 40 million workers and the wage rate would fall. d. There would be a surplus of 20 million workers and the wage rate would fall. e. There would be unemployment Figure 7-1 Real Hourly wage Labor Supply tLabor Demand Miltions of Workers 110 130 150

Explanation / Answer

Answer
The wage rate of 6 is below equilibrium wage which increases demand and decreases supply so the market is in shortage
shortage=Qd-Qs
=150-110
=40 million workers
option a

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