The labor supply curve is given by the equation L_S = 3W + 20 and the labor demand curve is given by the equation L_D = 80 − 2W. If the wage is $20, there will be a _________ of _________ workers. A) surplus; 80 B) shortage; 40 C) shortage; 80 D) surplus; 40 E) surplus; 20

Question

Quizplus · Accepted Answer

At a wage of $20, L_S = 3(20) + 20 = 80 and L_D = 80 - 2(20) = 40. Therefore, there is a surplus of 80 - 40 = 40 workers.

The Labor Supply Curve Is Given by the Equation LS

The Labor Supply Curve Is Given by the Equation L_S