The following figure shows wage rate versus quantity of labor.

-Refer to the figure above.If S₀ is the supply of labor,D₀ is the labor demand curve during a cyclical downturn,and D₁ is the labor demand curve during a cyclical expansion,which expression best represents the level of unemployment during the downturn? (Assume that the level of unemployment during the expansion is zero.)

Question

The following figure shows wage rate versus quantity of labor.
 
-Refer to the figure above.If S₀ is the supply of labor,D₀ is the labor demand curve during a cyclical downturn,and D₁ is the labor demand curve during a cyclical expansion,which expression best represents the level of unemployment during the downturn? (Assume that the level of unemployment during the expansion is zero.)

Quizplus · Accepted Answer

Unemployment during the downturn is represented by the difference between the quantity of labor supplied (Qᵤ) and the quantity of labor demanded (Q₀) at the downturn's wage rate.

The Following Figure Shows Wage Rate Versus Quantity of Labor