Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
An increase in fringe benefits offered by employers leading to higher demand for labor.
B
A decrease in the minimum wage causing a surplus of labor.
C
A significant rise in unemployment benefits reducing the supply of labor.
D
An increase in the overall number of jobs available without a corresponding increase in fringe benefits.
Understanding the Answer
Let's break down why this is correct
Answer
In a labor market, the demand for workers can change based on the benefits that come with a job, like health insurance or paid vacation. If a company decides to offer better fringe benefits, it can attract more applicants, which increases the demand for labor. For example, if a tech company starts offering free gym memberships and flexible working hours, more people will want to work there, shifting the demand curve to the right. This shift means that at the original wage, there are more job seekers than jobs available, leading to higher wages until a new equilibrium is reached. Eventually, the market will adjust, and a new balance will be found between the number of workers wanting jobs and the number of jobs available with those attractive benefits.
Detailed Explanation
When employers offer more fringe benefits, more people want to work for them. Other options are incorrect because Some might think lowering the minimum wage helps everyone find jobs; It's easy to think that higher unemployment benefits mean fewer people will look for jobs.
Key Concepts
labor demand
labor market equilibrium
fringe benefits
Topic
Demand and Supply in Labor Markets
Difficulty
hard level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.