Several Members of Parliament have been greatly concerned about the fairness of salaries in the marketplace. They are contemplating enacting a law that would fix the wage rate at WA. Their aides have returned with the results of an investigation into the matter, as portrayed in Graphs A and B.
FIGURE 11-1

-Refer to Figure 11-1. If the law were not enacted, what would the prevailing wage rate and quantity of labour at equilibrium in the market for computer software programmers be?

Question

Several Members of Parliament have been greatly concerned about the fairness of salaries in the marketplace. They are contemplating enacting a law that would fix the wage rate at WA. Their aides have returned with the results of an investigation into the matter, as portrayed in Graphs A and B.
FIGURE 11-1
 
-Refer to Figure 11-1. If the law were not enacted, what would the prevailing wage rate and quantity of labour at equilibrium in the market for computer software programmers be?

Quizplus · Accepted Answer

The prevailing wage rate would be WA and the quantity of labour at equilibrium in the market for computer software programmers would be Q5. This is because the supply and demand curves would intersect at point A, which corresponds to wage rate WA and quantity of labour Q5.

Several Members of Parliament Have Been Greatly Concerned About the Fairness