Question

An increase in the real wage would result in a:________. a. shift of the labor demand curve, causing an increase in the number of workers hired by the firm. b. shift of the labor demand curve, causing a decrease in the number of workers hired by the firm. c. movement along the labor demand curve, causing a decrease in the number of workers hired by the firm. d. movement along the labor demand curve, causing an increase in the number of workers hired by the firm.

Answer 1

Option C

An increase in the real wage would result in a: movement along the labor demand curve, causing a decrease in the number of workers hired by the firm.

Explanation:

The wage rate is circumscribed by the crossing of supply and demand for labor. The demand curve depends on the marginal product of labor and the cost of the good labor originates.

A variation in the wage or payroll will end in a shift in the amount necessitated of labor. If the wage rate increases, organizations will require to hire fewer employees. The quantity of labor demanded will decline, and there will be a movement skyward on the demand curve.