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O-LevelEconomicsMicroeconomic decision makers2281/11 · May/June 2024 · Q111 Mark

The diagram shows the demand and supply curve of labour for a firm. The initial wage rate is given by W₀ and the equilibrium quantity of labour employed is L₀. A trade union that represents all of the workers negotiates a rise in wage rate to W₁. [Diagram of labour market with wage rate on y-axis, quantity of labour on x-axis, D and S curves, W0, W1, L0, L1, L2] What is the amount of unemployment that results from this wage rise?

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AOL₁
BL₀L₂
CL₁L₀
DL₁L₂

✓ Correct answer

D: L₁L₂

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About this question

Topic
Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source
O-Level Economics, May/June 2024 Paper 1 Variant 1, question 11.

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