When workers earn below-subsistence wages in a free market economy, some workers will starve. As a result, the supply of labor curve will shift:
A) rightward, causing the wage to fall further.
B) rightward, causing the wage to rise.
C) leftward, causing the wage to fall further.
D) leftward, causing the wage to rise.

Question

Quizplus · Accepted Answer

When workers starve and leave the labor force, the supply of labor decreases, shifting the supply curve leftward, which typically causes wages to rise due to reduced labor availability.

When Workers Earn Below-Subsistence Wages in a Free Market Economy