Figure 45.1
-In Figure 45.1, the money that employers pay their employees at the equilibrium wage-labor combination is

Question

Quizplus · Accepted Answer

At the equilibrium wage-labor combination, the quantity of labor demanded equals the quantity of labor supplied, which is represented by the point W*. The equilibrium wage is determined at this point, where the supply and demand curves intersect. Employers pay their employees the equilibrium wage, which is represented by the horizontal line from W* to the vertical axis at CL*. The amount of money that employers pay their employees at the equilibrium wage-labor combination is the total area of the rectangle bounded by the vertical line at CL*, the horizontal line at W*, the origin, and the supply curve. This area is represented by OW*CL*, which is option B.

Figure 45.1 -In Figure 45.1, the Money That Employers Pay Their Employees