17. Consider a labor market in which the intersection of the demand curve and th

Question

17. Consider a labor market in which the intersection of the demand curve and the supply curve occurs on the “backward-bending” part of the labor supply curve (i.e. the part where the labor supply curve is downward sloping), but the demand curve is steeper than the supply curve. Which of the following best describes the effect a shift to the right of the labor demand curve?

a) Equilibrium wage increases, equilibrium employment increases

b) Equilibrium wage decreases, equilibrium employment increases

c) Equilibrium wage increases, equilibrium employment decreases

d) Equilibrium wage decreases, equilibrium employment decreases

19. Compared to a firm in a competitive market, a unionized firm usually has:

a) Higher wages, higher employment

b) Higher wages, lower employment

c) Lower wages, higher employment

d) Lower wages, lower employment

20. Two identical workers:

a) Must always receive the same wage in the market

b) Never receive the same wage in the market

c) Could receive the same wage in the market

d) Do not go to the same market

Explanation / Answer

1: equilibrium wage decreases, equilibrium employment increases.

2: higher wages, higher employment

3: two identical workers Must receive the same wage in the market

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.