Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Wages increase
B
Wages decrease
C
Employment decreases
D
Labor demand increases
Understanding the Answer
Let's break down why this is correct
Answer
When there is an increase in labor supply, it means that more people are looking for jobs. This can happen for various reasons, such as more workers entering the job market or people moving to an area. With more workers available, employers have a larger pool of candidates to choose from, which can lead to increased competition among job seekers. As a result, wages may decrease because employers can offer lower pay since there are many applicants for each job. For example, if a company needs to hire 10 workers but suddenly 30 people apply, they might not need to pay as much to attract those workers, leading to a lower equilibrium wage in the labor market.
Detailed Explanation
When more people want to work, there are more workers available. Other options are incorrect because Some might think more workers means higher wages; It's easy to think that more workers means fewer jobs.
Key Concepts
labor supply
Topic
Labor Market Equilibrium
Difficulty
easy level question
Cognitive Level
understand
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