Other things equal, one would predict that market wages would be relatively high when
A)the supply of labor is high.
B)the demand for labor is low.
C)the supply of labor is low.
D)Both (a.) and (b.) are correct

Question

Quizplus · Accepted Answer

When the supply of labor is low, it means there are fewer workers available to fill the job openings. This can lead to competition among employers to attract workers, which drives up wages. Therefore, market wages would be relatively high in this situation. On the other hand, when the supply of labor is high or the demand for labor is low, there may be more workers than there are job openings, which can lead to lower wages.

Other Things Equal, One Would Predict That Market Wages Would