Suppose That the Labor Supply Curve for a Large University

Suppose that the labor supply curve for a large university in a small town is given by w = 160 + 0.03L, where L is number of units of labor per week and w is the weekly wage paid per unit of labor. If the university is currently hiring 1,000 units of labor per week, the marginal cost of an additional unit of labor

A) equals the wage rate.
B) is twice the wage rate.
C) equals the wage rate plus $60.
D) equals the wage rate plus $30.
E) equals the wage rate plus $90.

Correct Answer:

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