The reason that the supply curve for labor in a purely competitive market slopes upward is because
A) the wage rate paid to workers falls as more are hired.
B) the marginal product of labor falls as output increases.
C) marginal resource cost rises as productivity increases.
D) higher wages must be paid to bid workers away from other opportunities.

Question

Quizplus · Accepted Answer

The law of supply states that as the price of a good or service increases, the quantity supplied of that good or service will increase as well. In the case of labor, the "price" is the wage rate. As higher wages are offered, more workers are willing to supply their labor. Additionally, as the number of workers in a certain industry or job increases, the opportunity cost of leaving that job to work elsewhere becomes greater. Therefore, employers must offer higher wages to entice workers away from their current jobs. This means that the supply curve for labor in a purely competitive market will slope upward because higher wages are required to encourage additional labor supply.

The Reason That the Supply Curve for Labor in a Purely