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A Level Economics:

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Due to negotiation of wage ow , the total wage will definitely rise (half answer) you can see with the help of my modifications in the diagram that when ow wage was set the intersection point of the new wage level and mrpl would now determine the number of labour . As a consequence the no. of labour increased as evident in the modification (dotted line )
 

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In such questions words such as 'relative' and 'real' are the key words...in last option I.e D sounds better because it has taken effect of tax..real is after the deductions of tax ..we cannot rely on option A since we cannot take decision in isolation and not considering the real effect .. so D is a more suitable option since it accounts for income tax effect
 
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In such questions words such as 'relative' and 'real' are the key words...in last option I.e D sounds better because it has taken effect of tax..real is after the deductions of tax ..we cannot rely on option A since we cannot take decision in isolation and not considering the real effect .. so D is a more suitable option since it accounts for income tax effect
so every time for questions like these, i choose the one with word real?
 
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