Figure 19-5
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what is the surplus of labor if a minimum wage of $8 per hour is imposed on this market?
A)100
B)200
C)300
D)400

Question

Figure 19-5 
-Refer to Figure 19-5. Given demand for labor, D1, and supply of labor, S1, what is the surplus of labor if a minimum wage of $8 per hour is imposed on this market?
A)100 
B)200 
C)300 
D)400

Quizplus · Accepted Answer

The surplus of labor is the amount of labor supplied (S1) minus the amount of labor demanded (D1) at the price floor of $8 per hour. At this price, the quantity of labor supplied is 500 and the quantity demanded is 200, resulting in a surplus of labor of 300 (500-200=300). Therefore, the best choice is C.

Figure 19-5 -Refer to Figure 19-5. Given Demand for Labor, D1, and Labor