A decrease in the real wage would result in a
A)movement along the labor demand curve, causing an increase in the number of workers hired by the firm.
B)shift of the labor demand curve, causing an increase in the number of workers hired by the firm.
C)movement along the labor demand curve, causing a decrease in the number of workers hired by the firm.
D)shift of the labor demand curve, causing a decrease in the number of workers hired by the firm.

Question

Quizplus · Accepted Answer

A decrease in the real wage would make it less costly for firms to hire additional workers, so they would hire more. This would cause a movement along the labor demand curve, rather than a shift of the curve.

A Decrease in the Real Wage Would Result in a