Consider a labor market in equilibrium. If the demand curve shifts to the right while the supply curve shifts to the left, then the wage rate in the market will ________.

Question

Quizplus · Accepted Answer

When the demand curve shifts to the right, it indicates an increase in demand for labor, which would tend to increase the wage rate. A leftward shift in the supply curve indicates a decrease in the supply of labor, which also tends to increase the wage rate. Both shifts working together will unambiguously increase the wage rate.

Consider a Labor Market in Equilibrium