Figure 18-7

-Refer to Figure 18-7.When the relevant labor supply curve is S₁,and the labor market is in equilibrium,the

Question

Figure 18-7
 
-Refer to Figure 18-7.When the relevant labor supply curve is S₁,and the labor market is in equilibrium,the

Quizplus · Accepted Answer

When the labor supply curve is S₁, the equilibrium wage is W1, which is the intersection point of the labor demand curve and labor supply curve. At this wage rate, the opportunity cost of leisure to workers is W1, meaning they are willing to forego leisure time in exchange for earning W1 in the labor market. Additionally, the value of the marginal product of labor to firms is also W1 since they are willing to pay that wage to attract workers who produce that much value for the firm. Therefore, all of the above statements are correct.

Figure 18-7 -Refer to Figure 18-7.When the Relevant Labor Supply Curve Is