The real wage will increase if:
A)the supply of labor increases.
B)the productivity of labor increases.
C)the price of output decreases.
D)the supply of capital decreases.

Question

Quizplus · Accepted Answer

An increase in productivity of labor leads to an increase in output per worker, which in turn leads to an increase in wages. Therefore, the real wage will increase if the productivity of labor increases. The other options (A, C, and D) do not necessarily lead to an increase in real wages.

The Real Wage Will Increase If