Table 4-3 shows a hypothetical demand and supply schedules for the low-skilled labor market in the city of Amman.
-Refer to Table 4 -3. What is the equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*)?
A) W* = US$6.50; Q* = 360,000
B) W* = US$7.00; Q* = 740,000
C) W* = US$7.00; Q* = 370,000
D) W* = US$6.50; Q* = 380,000

Question

Table 4-3 shows a hypothetical demand and supply schedules for the low-skilled labor market in the city of Amman.
-Refer to Table 4 -3. What is the equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*)?
A) W* = US$6.50; Q* = 360,000 
B) W* = US$7.00; Q* = 740,000 
C) W* = US$7.00; Q* = 370,000 
D) W* = US$6.50; Q* = 380,000

Quizplus · Accepted Answer

The equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*) occur where the supply and demand for labor intersect. This point ensures that the quantity of labor supplied equals the quantity of labor demanded, leading to the equilibrium conditions.

Table 4-3 Shows a Hypothetical Demand and Supply Schedules for the Low-Skilled