The following graph shows the labor market. The vertical axis measures wage in dollars, and the horizontal axis measures labor in hours. The total earnings of labor in equilibrium equal _____.
Figure 11.1

A)$40
B)$80
C)$160
D)$16
E)$8

Question

​The following graph shows the labor market. The vertical axis measures wage in dollars, and the horizontal axis measures labor in hours. The total earnings of labor in equilibrium equal _____. ​
Figure 11.1

A)$40 
B)$80 
C)$160 
D)$16 
E)$8

Quizplus · Accepted Answer

The total earnings of labor in equilibrium is determined by the intersection of the labor supply and labor demand curves, which occurs at point E. At point E, the equilibrium wage is $10 per hour and the equilibrium quantity of labor is 16 hours. Therefore, the total earnings of labor in equilibrium are $10 per hour x 16 hours = $160.

​The Following Graph Shows the Labor Market

The Following Graph Shows the Labor Market