Refer to the following figure when answering
Figure 15.1: The Labor Market
-Consider Figure 15.1, which is a representation of the labor market. In 2005, Hurricane Katrina hit the Gulf Coast of the United States; this would cause a shift from curve ________ because this is an example of a(n) ________.
A) $a \rightarrow b$; negative TFP shock
B) $b \rightarrow a$; increase in TFP
C) $d \rightarrow c$; increase in the interest rate
D) $c \rightarrow d$; rise in government expenditure
E) None of these answers are correct.

Question

Refer to the following figure when answering     
Figure 15.1: The Labor Market 
-Consider Figure 15.1, which is a representation of the labor market. In 2005, Hurricane Katrina hit the Gulf Coast of the United States; this would cause a shift from curve ________ because this is an example of a(n) ________.
A) $a \rightarrow b$; negative TFP shock 
B) $b \rightarrow a$; increase in TFP 
C) $d \rightarrow c$; increase in the interest rate 
D) $c \rightarrow d$; rise in government expenditure 
E) None of these answers are correct.

Quizplus · Accepted Answer

Hurricane Katrina caused a negative TFP shock, which would shift the labor supply curve to the left (from curve a to curve b).

Refer to the Following Figure When Answering a→ba \rightarrow ba→b ; Negative TFP Shock B)

Refer to the Following Figure When Answering $a \rightarrow b$ ; Negative TFP Shock
B)