People base their labor supply on the because they care about .

Question

Quizplus · Accepted Answer

People base their labor supply on the real wage, which takes into account not just the money wage, but also the price level and what their earnings will actually buy. A higher money wage might not necessarily result in an increase in real wage if prices of goods and services also increase. Therefore, people are more concerned with the real wage as it reflects their actual purchasing power.

People Base Their Labor Supply on the Because They Care