Refer to the figure above. What is the equilibrium employment and wage rate after the demand curve shifts to LD2?
A) 20 units of labor and $35 B) 5 units of labor and $15
C) 15 units of labor and $20 D) 10 units of labor and $10
C
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To be effective in raising people's wages, a minimum wage must be set
A) above the equilibrium wage rate. B) below the equilibrium wage rate. C) equal to the equilibrium wage rate. D) below $7. E) either above or below the equilibrium wage depending on whether the supply curve of labor shifts rightward or leftward in response to the minimum wage.
The concept of opportunity cost in a fully employed economy with technology and resources held constant tells us that
a. expansion of output in one industry means expansion cannot occur in another industry. b. expansion of output in one industry means output in another industry must contract. c. output cannot be increased in any industry. d. output of all industries must contract until more resources are found.