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Suppose the Labor Supply Curve Facing All Industries in an Economy

Question 46

Multiple Choice

Suppose the labor supply curve facing all industries in an economy is a vertical line.Given this,which of the following statements about the supply curve of labor confronting any particular industry is true?


A) The supply curve of labor confronting any particular industry will also be vertical because the aggregate supply curve is a horizontal summation of industry supply curves.
B) The supply curve of labor confronting any particular industry will also be inelastic because the stock of labor in the economy is fixed in the short-run.
C) The supply curve of labor confronting any particular industry will be elastic because labor can shift easily from one industry to another.
D) The supply curve of labor confronting any particular industry will be elastic because labor and capital are perfectly substitutable in the short-run.

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