High-wage workers are
A)more likely than low-wage workers to supply more labor when the wage rate rises.
B)about as likely as low-wage workers to supply more labor when the wage rate rises.
C)less likely than low-wage workers to supply more labor when the wage rate rises.
D)The available evidence does not indicate how high-wage workers and low-wage workers differ in responding to changes in the wage rate.

Question

Quizplus · Accepted Answer

High-wage workers may respond less to changes in the wage rate because they may already be working close to their desired hours and have less ability or willingness to work additional hours at higher wages. On the other hand, low-wage workers may be more willing and able to work additional hours at higher wages to meet their income needs. This is supported by empirical evidence that suggests that high-wage workers have a lower elasticity of labor supply compared to low-wage workers, meaning they are less responsive to changes in the wage rate.

High-Wage Workers Are