Exhibit 4-4 Supply and demand curves for good X

-An increase in the wage rate paid to workers producing good X would be represented by which of the graphs in Exhibit 4-4?

Question

Exhibit 4-4 Supply and demand curves for good X
 
-An increase in the wage rate paid to workers producing good X would be represented by which of the graphs in Exhibit 4-4?

Quizplus · Accepted Answer

An increase in the wage rate paid to workers producing good X would cause an increase in production costs, which would shift the supply curve to the left. This would result in a higher equilibrium price and lower equilibrium quantity, as shown in Graph B.

Exhibit 4-4 Supply and Demand Curves for Good X