What is the relationship between wages and the supply of labor?
A) The higher the wage, other things constant, the more labor supplied.
B) The higher the wage, other things constant, the less labor supplied.
C) The higher the wage, other things constant, firms hire more workers.
D) The higher the wage, other things constant, firms hire fewer workers.
E) There is no relationship between wages and labor.

Question

Quizplus · Accepted Answer

According to the Law of Supply, as the price (in this case, wage) of a good or service increases, the quantity supplied also increases. This means that as wages increase, workers are more willing to supply their labor as they are able to receive a higher income in exchange.

What Is the Relationship Between Wages and the Supply of Labor