In the competitive electrical motor industry, the workers at Galt Inc. threaten to go on strike.$$ To avoid the strike, Galt Inc. agrees to pay its workers more.$$ At all other factories, the wage remains the same.$$ Use the figure below to answer the following questions.

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What does this do to the marginal cost curve at Galt Inc.?

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$[$ Select $]$

$["$It makes the marginal cost curve shift upward.", $"$It makes the marginal cost curve shift downward.", $"$It does not change the marginal cost curve.", $"$It makes the marginal cost curve get flatter."$]$

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What will happen to the number of motors produced by Galt Inc.?

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$[$ Select $]$

$["$The number of motors produced will rise.", "The number of motors produced will remain the same.", "The number of motors produced will fall.", "This cannot be determined without more information."$]$

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In this competitive market, what will the Galt Inc. labor agreement do to the market price of motors?

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$[$ Select $]$

$["$The price of motors will rise.", "The price of motors will remain the same.", "The price of motors will fall.", "This cannot be determined without more information."$]$

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Surely, more workers will want to work at Galt Inc. now that it pays higher wages.$$ Will more workers actually work at Galt Inc. after the labor agreement is struck?$$ Why or why not?

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$[$ Select $]$

$["$Yes$.$ More workers will work at Galt because there will be a greater quantity of workers supplied with the higher wages.", $"$No$.$ Fewer workers will work at Galt because the higher marginal cost after the labor deal means Galt will be making fewer motors.", "Yes. More workers will work at Galt because the higher marginal cost after the labor deal means Galt will be making more motors.", $"$No$.$ The number of workers at Galt will remain the same after the labor deal is in place."$]$

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