If an employer has to raise the wage rate of workers in order to employ more labor, then the marginal labor cost curve of the employer
A) lies above the supply curve of labor.
B) is the supply curve of labor that it faces.
C) lies below the supply curve of labor.
D) is a downward-sloping curve.

Question

Quizplus · Accepted Answer

If the employer has to raise the wage rate to employ more labor, it suggests that the supply of labor is limited and the employer has to offer higher wages to attract more workers. Therefore, the marginal labor cost curve, which represents the change in labor cost when more workers are hired, will lie above the supply curve of labor, which shows the quantity of labor supplied at different wage rates.

If an Employer Has to Raise the Wage Rate of Workers