The local labor market for lawn-mowing workers is initially in equilibrium. These workers are also able to clean swimming pools and have no preference for one job over the other. If the wage rate for pool cleaning rises, which of the following would occur in the lawn-mowing labor market?
a. Both labor demand and labor supply will drop, leading to a lower wage rate and lower employment.
b. Both labor demand and labor supply will rise, leading to a higher wage rate and lower employment.
c. Labor supply will drop, leading to a higher wage rate and lower employment.
d. Labor supply will drop, leading to a lower wage rate and lower employment.
e. Labor demand will drop, leading to a lower wage rate and lower employment.
C
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An 18 percent increase in the price of a small car results in a 10 percent increase in the quantity supplied. The price elasticity of supply is equal to
A) 1.80. B) 0.55. C) 0.75. D) 0.40.
Opportunity cost is defined as
A) the highest valued alternative that must be given up to engage in an activity. B) the benefit of an activity. C) the total value of all alternatives that must be given up to engage in an activity. D) the monetary expense associated with an activity.
If each taxpayer paid the same lump-sum amount regardless of income level, the tax system would be:
A. regressive. B. progressive. C. disproportionate. D. proportional.
Cab drivers operating from JFK Airport to the City of New York legally must charge a specific fare. This is an example of
A. social regulation. B. the rate of return test. C. economic regulation. D. the market share test.