In order to see how the labor market works as a whole,we need to add up all the:

Question

Quizplus · Accepted Answer

To understand the labor market as a whole, we need to consider the market level supply and demand, which can be derived by adding up the supply curves of individual workers and the demand curves of individual firms. This will help us understand the wage levels and employment levels in the entire labor market. Option B is incorrect because taking the weighted average of observed equilibrium wages across all individual markets assumes that all individual labor markets are the same size, which may not be true in reality. Option C is incorrect because the demand curves of individual workers do not exist as workers are the suppliers of labor, and it is firms who create demand for labor.

In Order to See How the Labor Market Works as a Whole,we