What is this labor market's equilibrium labor quantity?
- A. 2,000 hours per month
- B. 3,000 hours per month
- C. 4,000 hours per month
- D. 5,000 hours per month
Correct Answer & Rationale
Correct Answer: C
In this labor market, the equilibrium labor quantity occurs where the supply of labor equals the demand for labor. Option C, 4,000 hours per month, represents this balance, indicating that employers are willing to hire this amount at the prevailing wage. Option A (2,000 hours) suggests underemployment, where labor supply exceeds demand, leading to inefficiencies. Option B (3,000 hours) may indicate a slight imbalance, as demand has not fully met supply. Option D (5,000 hours) reflects an oversupply of labor, resulting in unemployment, as demand cannot accommodate this quantity. Thus, 4,000 hours is the optimal equilibrium point.
In this labor market, the equilibrium labor quantity occurs where the supply of labor equals the demand for labor. Option C, 4,000 hours per month, represents this balance, indicating that employers are willing to hire this amount at the prevailing wage. Option A (2,000 hours) suggests underemployment, where labor supply exceeds demand, leading to inefficiencies. Option B (3,000 hours) may indicate a slight imbalance, as demand has not fully met supply. Option D (5,000 hours) reflects an oversupply of labor, resulting in unemployment, as demand cannot accommodate this quantity. Thus, 4,000 hours is the optimal equilibrium point.
Other Related Questions
What is this labor market's equilibrium wage rate?
- A. $4 per hour
- B. $8 per hour
- C. $12 per hour
- D. $16 per hour
Correct Answer & Rationale
Correct Answer: C
In a labor market, the equilibrium wage rate occurs where the quantity of labor supplied equals the quantity of labor demanded. Option C, $12 per hour, represents this balance, reflecting conditions where employers are willing to hire the same number of workers that job seekers are willing to accept. Option A, $4 per hour, is too low, leading to a surplus of labor as more workers seek jobs than employers are willing to hire. Option B, $8 per hour, may still create an imbalance, as it might not attract enough skilled workers. Option D, $16 per hour, is likely too high, resulting in a labor shortage as fewer employers can afford to pay that rate. Thus, $12 per hour is the optimal equilibrium wage.
In a labor market, the equilibrium wage rate occurs where the quantity of labor supplied equals the quantity of labor demanded. Option C, $12 per hour, represents this balance, reflecting conditions where employers are willing to hire the same number of workers that job seekers are willing to accept. Option A, $4 per hour, is too low, leading to a surplus of labor as more workers seek jobs than employers are willing to hire. Option B, $8 per hour, may still create an imbalance, as it might not attract enough skilled workers. Option D, $16 per hour, is likely too high, resulting in a labor shortage as fewer employers can afford to pay that rate. Thus, $12 per hour is the optimal equilibrium wage.
Which policy would be most effective to increase Grand Coast's comparative advantage over Toland?
- A. Raise taxes on factories and mills
- B. Encourage more workers to pursue fishing
- C. Maintain spending on infrastructure projects
- D. Improve technology used to produce timber
Correct Answer & Rationale
Correct Answer: B
Encouraging more workers to pursue fishing enhances Grand Coast's comparative advantage by capitalizing on its natural resources and existing industry strengths. This shift allows for specialization, leading to increased efficiency and production in fishing, where Grand Coast may already excel compared to Toland. Raising taxes on factories and mills (A) could deter investment and reduce manufacturing output, weakening economic competitiveness. Maintaining spending on infrastructure projects (C) may improve overall economic conditions but does not directly target enhancing comparative advantage. Improving technology for timber production (D) could be beneficial but may not align with Grand Coast's most advantageous industries compared to fishing.
Encouraging more workers to pursue fishing enhances Grand Coast's comparative advantage by capitalizing on its natural resources and existing industry strengths. This shift allows for specialization, leading to increased efficiency and production in fishing, where Grand Coast may already excel compared to Toland. Raising taxes on factories and mills (A) could deter investment and reduce manufacturing output, weakening economic competitiveness. Maintaining spending on infrastructure projects (C) may improve overall economic conditions but does not directly target enhancing comparative advantage. Improving technology for timber production (D) could be beneficial but may not align with Grand Coast's most advantageous industries compared to fishing.
As used in the highlighted text, 'continental United States' means the area comprising the nation's
- A. entire territory.
- B. Western region.
- C. first 48 states.
- D. 50 states.
Correct Answer & Rationale
Correct Answer: C
The term 'continental United States' specifically refers to the contiguous landmass of the nation, which includes the first 48 states, excluding Alaska and Hawaii. Option A is incorrect as it suggests the entire territory, including non-contiguous states and territories. Option B is wrong because it only addresses a specific region, neglecting the rest of the country. Option D is misleading since it includes Alaska and Hawaii, which are not part of the continental landmass. Thus, the phrase accurately describes the first 48 states, making it the most precise choice.
The term 'continental United States' specifically refers to the contiguous landmass of the nation, which includes the first 48 states, excluding Alaska and Hawaii. Option A is incorrect as it suggests the entire territory, including non-contiguous states and territories. Option B is wrong because it only addresses a specific region, neglecting the rest of the country. Option D is misleading since it includes Alaska and Hawaii, which are not part of the continental landmass. Thus, the phrase accurately describes the first 48 states, making it the most precise choice.
Which point on this PPF graph represents a currently unobtainable output level for this economy?
- A. V
- B. X
- C. Y
- D. Z
Correct Answer & Rationale
Correct Answer: D
Point D represents a currently unobtainable output level for this economy because it lies outside the production possibilities frontier (PPF). The PPF illustrates the maximum efficient production of two goods, given the available resources and technology. Point A (V), Point B (X), and Point C (Y) are all located on or within the PPF, indicating feasible production levels that the economy can achieve. In contrast, Point D (Z) exceeds these capabilities, signifying an output level that cannot be realized with the current resources and technology. Thus, only Point D is unattainable.
Point D represents a currently unobtainable output level for this economy because it lies outside the production possibilities frontier (PPF). The PPF illustrates the maximum efficient production of two goods, given the available resources and technology. Point A (V), Point B (X), and Point C (Y) are all located on or within the PPF, indicating feasible production levels that the economy can achieve. In contrast, Point D (Z) exceeds these capabilities, signifying an output level that cannot be realized with the current resources and technology. Thus, only Point D is unattainable.