The table gives the demand and supply schedules for labor in the market for low-

Question

The table gives the demand and supply schedules for labor in the market for low-skilled labor Wage rate Quantity of labor dollars per demanded Quantity of labor In the market fot high-skiled labor, the value of marginal product of ska is $5 an hour and the cost of acquiring skill is $5 an hour, what is the equillbrium quandity of high-skilled labor employed? (hours per day) 10 15 The equilibrium quantity of high-skilled labor employed is hours a day 600 25 Enter your answer in the answer box 5 6 backspe D F GHJK L

Explanation / Answer

Equilibrium quantity of high skilled labor employed is 400  

At 400 hours a day, with MPL=$5 for 8 hours = 400/(5*8) = 400/40 = 10 labors

Wage Rate Quantity of labor demand Quantity of labor supplied 5 800 0 10 600 200 15 400 400 Equilibrium 20 200 600 25 0 800

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