An increase in the wage will cause the output supply curve in the one-input model to shift in unless labor is an inferior input.

Question

Quizplus · Accepted Answer

In the one-input model, an increase in the wage would cause the output supply curve to shift left (or decrease) because it would increase the cost of production, not shift in unless labor is considered an inferior input. The concept of inferior or superior inputs is not typically applied to labor in the context of supply curve shifts due to wage changes.

An Increase in the Wage Will Cause the Output Supply