Holding other factors constant, if food prices decline relative to the prices of other products, then the real wages of agricultural workers will ________ and employment of agricultural workers will ________.
A)increase; increase
B)increase; decrease
C)decrease; not change
D)decrease; decrease

Question

Quizplus · Accepted Answer

If food prices decline then the producers of food will be less inclined to hire workers, so the demand for labor shifts left wages and employment will decrease.

Holding Other Factors Constant, If Food Prices Decline Relative to the Prices