The following table shows the hours of labor supplied by six ...

[pepyto]

The following table shows the hours of labor supplied by six workers at different wage rates:
 
  Wage Rate (per hour) Amanda (hours worked per day) Wendy
  (hours worked per day) Shaun
  (hours worked per day) Kevin
  (hours worked per day) Leo
  (hours worked per day) Ryan
  (hours worked per day)
  12 4 3 2 4 3 5
  18 6 7 4 6 7 8
  24 8 9 9 9 10 11
  30 9 10 11 11 12 13
  36 10 11 12 12 13 14
 
  a) If the market for labor consists of only these six workers, calculate the market supply of labor at the different wage rates.
  b) If the market demand for labor is 56 hours per day, what is the equilibrium wage rate?
  c) If the market demand for labor is 38 hours per day, what is the equilibrium wage rate?

Question 2

When technology advances, supply
 
  A) increases, which is represented by a leftward shift in the supply curve.
  B) increases, which is represented by a rightward shift in the supply curve.
  C) decreases, which is represented by a rightward shift in the supply curve.
  D) decreases, which is represented by a leftward shift in the supply curve.
  E) remains the same; only quantity supplied changes.

[Ptupou85]

Answer to Question 1

a) The market supply curve for labor is derived by aggregating the individual supply curves of labor. The following table shows the daily market supply curve for labor:

Wage Rate (per hour) Amanda (hours worked per day) Wendy
(hours worked per day) Shaun
(hours worked per day) Kevin
(hours worked per day) Leo
(hours worked per day) Ryan
(hours worked per day) Market supply of Labor (hours per day)
12 4 3 2 4 3 5 21
18 6 7 4 6 7 8 38
24 8 9 9 9 10 11 56
30 9 10 11 11 12 13 66
36 10 11 12 12 13 14 72

b) At equilibrium, the market demand for labor is equal to the market supply of labor.
The market demand for 56 hours of labor is equal to the market supply of labor of 56 hours when the wage rate is 24 per hour. Hence, the equilibrium wage rate is 24 per hour.

c) Similarly, the market demand of 38 hours of labor is equal to the market supply of labor of 38 hours at the wage rate of 18 per hour. Hence, the equilibrium wage rate is 18 per hour.

Answer to Question 2

B

[pepyto]

YES! Correct, THANKS for helping me on my review

[recede]

TYSM