An upward-sloping labor supply curve implies that
A)a firm can always hire more workers, even without increasing the wage.
B)more workers are willing to work when wages are low.
C)more workers are willing to work as the market wage increases.
D)labor supplied is fixed.
E)there is a continuously increasing demand for labor.

Question

Quizplus · Accepted Answer

An upward-sloping labor supply curve means that as the market wage increases, more workers are willing to supply their labor. This is because the higher wage compensates for the opportunity cost of not engaging in other activities, such as leisure or household work. Therefore, firms may have to increase the wage they offer to attract more workers. Option A is incorrect because a firm can only hire more workers if it offers a higher wage or better working conditions. Option B is incorrect because more workers may actually drop out of the labor force if wages are too low, as the cost of working may outweigh the benefits. Option D is incorrect because labor supply can vary depending on the wage rate. Option E is incorrect because an upward-sloping labor supply curve only reflects the behavior of workers, not employers.

An Upward-Sloping Labor Supply Curve Implies That