Economics 0455 · IGCSE · Workers

Workers — practice question

The diagram illustrates the labour demand and labour supply curves for a firm. The starting wage rate is shown by $W_0$ and the equilibrium quantity of labour employed is $L_0$. A trade union representing all of the workers negotiates an increase in the wage rate to $W_1$. What amount of unemployment is caused by this rise in wages?

  • A$OL_1$
  • B$L_0L_2$
  • C$L_1L_0$
  • D$L_1L_2$

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