Use the following to answer questions:
Figure: Labor Market 1
-(Figure: Labor Market 1) Refer to the figure. If there is a price ceiling set at $6, how much shortage or surplus, if any, is there?
A) 60 million hours
B) 80 million hours
C) 120 million hours
D) There is no shortage and no surplus.

Question

Use the following to answer questions:
Figure: Labor Market 1 
-(Figure: Labor Market 1) Refer to the figure. If there is a price ceiling set at $6, how much shortage or surplus, if any, is there?
A) 60 million hours 
B) 80 million hours 
C) 120 million hours 
D) There is no shortage and no surplus.

Quizplus · Accepted Answer

A price ceiling set below the equilibrium price creates a shortage. If the equilibrium quantity is 120 million hours and the quantity supplied at $6 is 60 million hours, the shortage is 60 million hours.

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