Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Labor supply decreases
B
Labor supply remains constant
C
Labor supply increases
D
Labor supply becomes inelastic
Understanding the Answer
Let's break down why this is correct
Answer
When wages increase in a competitive labor market, the supply of labor typically goes up. This happens because higher wages attract more people to seek jobs, as they can earn more money for their work. For example, if a factory raises its pay for workers, more individuals may apply for those positions, including people who were previously not interested in that kind of job. As a result, the number of workers available increases, which helps employers find the labor they need. Overall, higher wages make work more appealing, leading to a larger supply of labor in the market.
Detailed Explanation
When wages go up, more people want to work. Other options are incorrect because Some might think that higher wages scare people away from jobs; It's a common mistake to think wages don't change anything.
Key Concepts
labor supply
Topic
Profit Maximization in Labor Markets
Difficulty
easy level question
Cognitive Level
understand
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