In Okennewick, 180 people are willing to spend an hour working as pizza makers for an hourly wage of $20. For each additional $5 that the wage increases above $20, an additional 45 people are willing to spend an hour working. **Plot the Daily Labor Supply Curve:**For hourly wages of $20, $25, $30, $35, and $40, plot the daily labor supply curve for pizza makers on the following graph.**Graph Description:**- **Y-axis:** WAGE (Dollars per hour)- **X-axis:** LABOR (Number of workers)The graph is a blank plot intended for students to draw the supply curve. The supply curve will be upward sloping, starting at 180 workers for $20 and increasing by 45 workers for each $5 increase in wages.**Question:**What is one explanation for why this labor supply curve is upward sloping?- The opportunity cost of leisure increases as wages increase.- Labor production functions exhibit diminishing marginal returns.- Wages have to increase to accommodate union pressure.- Firms are willing to hire more pizza makers at a lower wage.

Equilibrium in labor market depends on the demand and supply of labor. The shape of the labor supply curve depends on hourly wage rate.The table and diagram for supply curve are given below. Number of Workers Wage Rate (Hourly) 180 20 225 25 270 30 315 35 360 40 A worker can either enjoy leisure or make pizzas for an hourly wage rate of $20. So, $20 is the opportunity cost of 1 hour of leisure. As hourly wage rate increases, the opportunity cost of leisure also increases. Hence, labor supply curve is upward sloping. Therefore, Option A is the correct answer. Option B is incorrect because in this context, there is no discussion on labor production and the corresponding marginal productivity of labor. Option C is incorrect because there is no mention of trade union pressure in this context. Option D is incorrect because the context is about labor supply and not labor demand. Option A is the correct answer because the opportunity cost of leisure increases as hourly wage rate of workers increase, which results in a upward sloping supply curve.

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What is one explanation for why this labor supply curve is upward sloping? O The opportunity cost of leisure increases as wages increase. Labor production functions exhibit diminishing marginal returns. O Wages have to increase to accommodate union pressure. O Firms are willing to hire more pizza makers at a lower wage.

What is one explanation for why this labor supply curve is upward sloping? O The opportunity cost of leisure increases as wages increase. Labor production functions exhibit diminishing marginal returns. O Wages have to increase to accommodate union pressure. O Firms are willing to hire more pizza makers at a lower wage.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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