Figure 19-5
-Refer to Figure 19-5. Suppose this market begins with demand for labor, D1, and supply of labor, S1, but the labor supply curve shifts to S2. Which of the following statements best describes the results?
A)Fewer workers are employed, but those who are employed earn a higher wage.
B)More workers are employed but they earn a lower wage.
C)More workers are employed and they earn a higher wage.
D)The same number of workers are employed and they earn a higher wage.

Question

Figure 19-5 
-Refer to Figure 19-5. Suppose this market begins with demand for labor, D1, and supply of labor, S1, but the labor supply curve shifts to S2. Which of the following statements best describes the results?
A)Fewer workers are employed, but those who are employed earn a higher wage. 
B)More workers are employed but they earn a lower wage. 
C)More workers are employed and they earn a higher wage. 
D)The same number of workers are employed and they earn a higher wage.

Quizplus · Accepted Answer

When the labor supply curve shifts to S2, the equilibrium wage rate increases, but the equilibrium quantity of labor decreases. This means that fewer workers are employed, but those who are employed earn a higher wage. This can be seen in the movement from point A to point B on the graph.

Figure 19-5 -Refer to Figure 19-5. Suppose This Market Begins with Demand