In the Classical Model, if the real wage increases, the quantity of labor demanded will _______ until it is ________ the quantity of labor supplied
A) increase; equal to
B) increase; less than
C) decrease; equal to.
D) decrease; more than.

Question

Quizplus · Accepted Answer

In the Classical Model, if the real wage increases, firms will demand less labor because labor becomes more expensive, leading to a decrease in the quantity of labor demanded until it is equal to the quantity of labor supplied. This is based on the principle that higher wages make labor more costly to employers, reducing their demand for workers.

In the Classical Model, If the Real Wage Increases, the Quantity