In the basic competitive model of labor markets,we see that:
A)individual firms and workers can exert a lot of influence over the wage rate.
B)there are only long-term contracts.
C)jobs are not identical to each other.
D)individual firms and workers have no control over the wage rate paid and received.

Question

Quizplus · Accepted Answer

In the basic competitive model of labor markets, the wage rate is determined by the intersection of the labor supply and demand curves, and individual firms and workers have no control over the wage rate paid and received. The model assumes perfect competition, where firms and workers are price takers and have no market power to influence the wage rate. Therefore, choice D is the correct option. Choices A, B, and C are incorrect as they describe features that are not consistent with the basic competitive model of labor markets.

In the Basic Competitive Model of Labor Markets,we See That