2 WAGE (Dolla 20 15 10 5 20 40 60 80 100 120 140 LABOR (Number of workers) 100 100 200 What is one explanation for why this labor supply curve is upward sloping? Labor production functions exhibit diminishing marginal returns. People prefer to spend time doing leisure activities rather than working. Wages have to increase to accommodate union pressure. The opportunity cost of leisure increases as wages increase.

Look at the diagram below. Let's assume that aggregate demand declines and a recession occurs, which causes a decrease in the demand for labor. Assuming prices, wages and salaries are sticky, then what is the total excess labor? Salary $45,000 $25,000 5000 11000 19000 Labor S D₁ Do

If an individual labor supply curve bends backward at some high wage, so does the market labor supply curve.​ True or False?

Fill in the blanks: Workers Employed 0 1 2 3 4 Quantity Produced 0 15 25 33 39 Output Price ($) 10 10 10 10 10 Refer to the above table for a profit-maximizing, competitive firm. If the prevailing wage is $100, then the firm will hire worker(s).