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 wage law were NOT enacted, what would the prevailing wage rate and quantity of labour in the marketplace for K-12 teachers at equilibrium 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 wage law were NOT enacted, what would the prevailing wage rate and quantity of labour in the marketplace for K-12 teachers at equilibrium be?

Quizplus · Accepted Answer

According to the graph, the equilibrium wage rate and quantity of labor in the marketplace without the law is at point E, where the supply and demand curves intersect. At this point, the wage rate is WB and the quantity of labor is Q2. Therefore, the answer is D, WB and Q2, respectively.

Several Members of Parliament Have Been Greatly Concerned About the Fairness