If the labor supply and demand curves cross at a wage of $20,
A) a wage rate of $10 per hour would lead to an excess demand for labor
B) a wage rate of $10 per hour would lead to an excess supply of labor
C) that wage causes a high rate of cyclical unemployment
D) employees are overpaid
E) a wage rate of $10 per hour would mean there is a significant amount of structural unemployment

Question

Quizplus · Accepted Answer

At a wage rate of $10, which is below the equilibrium wage of $20, there would be more demand for labor than supply, leading to an excess demand for labor.

If the Labor Supply and Demand Curves Cross at a Wage