The impact of a decrease in the wage rate on labor supply will be represented by ________,assuming all else equal.

Question

Quizplus · Accepted Answer

A decrease in the wage rate, assuming all else equal, results in a downward movement along the labor supply curve, not a shift of the curve itself. This is because the curve represents the relationship between wage rates and the quantity of labor supplied at those rates; a change in the wage rate moves the point of operation along the existing curve.

The Impact of a Decrease in the Wage Rate on Labor