Consider the following model of the labor market:
Labor supply:
Labor demand:
The endogenous variables are:
A) and .
B) and the equilibrium wage, w.
C) and the equilibrium wage, w.
D) the equilibrium quantity of labor, L*, and wage, w*.
E) and the equilibrium quantity of labor, L.

Question

Consider the following model of the labor market:
Labor supply: 
Labor demand: 
The endogenous variables are:
A) and . 
B) and the equilibrium wage, w. 
C) and the equilibrium wage, w. 
D) the equilibrium quantity of labor, L*, and wage, w*. 
E) and the equilibrium quantity of labor, L.

Quizplus · Accepted Answer

The endogenous variables in this labor market model are the equilibrium quantity of labor, L*, and the equilibrium wage, w*. These are determined by the intersection of the labor supply and labor demand curves. Therefore, the correct choice is D.

Consider the Following Model of the Labor Market