An increase in the wage rate ________ the quantity of labor supplied and ________ the quantity of labor demanded.

Question

Quizplus · Accepted Answer

An increase in wage rate would lead to an increase in the quantity of labor supplied as workers would be more willing to work at the higher wage rate. However, it would lead to a decrease in the quantity of labor demanded as employers would be less willing to hire as many workers at the higher wage rate. The opposite would happen if the wage rate decreased.

An Increase in the Wage Rate ________ the Quantity of Labor