. Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to "Calculate," you must show how you arrived at your final answer. Market Firm Wage S Wage WM WE MFC .D MRP OM Quantity QF Quantity of Labor of Labor The graph above shows a labor market and a typical individual firm that is hiring labor from that beyond your she Page 2 of 6 AP collegeBoard AP Microeconomics Test Booklet May 9 GRADED FROS market. (a) If WM = Wy, from what type of labor market does the firm hire its workers? (b) Assume the productivity of workers increases as a result of improvement in technology. What will happen to each of the following in the short run? (0) The market demand for labor (ii) The wage rate the firm will pay. Explain. (c) Suppose the firm only produces good X and that the price of good Y, a substitute good, decreases. What will happen to the optimal quantity of labor the firm will hire? Explain. (d) If the labor market were a monopsony, would the monopsonist hire more, fewer, or the same number of workers as Qu to maximize its profit? Please respond on separate paper, following directions from your teacher