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Unformatted text preview: the combined effect of individual labor supply curves results in a
greater number of labor hours being supplied at a higher wage
5. at high wages, people will decrease labor supply when wages rise further, and as a result make aggregate labor supply decrease.
Question 4 (1 point) In the figure above, assume the labor market is at equilibrium with 30
workers and a wage rate of $5 per day. Then the government imposes a
minimum wage of $10 per day. Which of the following is true?
5. Labor demand will decrease.
The economy will remain in equilibrium.
There will be a surplus of 20 workers.
Labor supply will increase.
There will be a shortage of 20 workers. Question 5 (1 point) In the figure above, which of the following could cause a shift from S 1
to S 2 ? 1. A government policy that restricts wages to $5 per day
2. An increase in the demand for labor
3. A change in preferences such that people increase their desire for
leisure 4. An increase in the wage rate
5. An increase in the population
Question 6 (1 point) In the figure above, the reason for the wage differential could be the fact
5. market B consists of workers with less human capital.
market B is unskilled labor.
market A consists of workers with more human capital.
market A is the market for a risky occupation.
All of these. Question 7 (1 point)
A compensating wage differential is a wage difference
1. that results because of a monopsony.
2. that makes up for the high risk or poor working conditions of a
3. that leads to more risks taken on the job.
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- Spring '08