-Refer to Figure 9-1.If labor supply shifts from S₂ to S₁,what will happen to the real hourly wage rate?

Question

Quizplus · Accepted Answer

The shift in labor supply suggests an increase in the number of workers willing to work at each wage level, which typically leads to a higher employment level. The specific outcomes (wage rate and employment level) depend on the details of the figure referenced, but generally, an increase in labor supply, if demand remains constant, can lead to higher employment but might put downward pressure on wages. However, without seeing the figure, the exact outcome can't be determined from general principles alone. Choice B suggests a scenario where the wage increases and employment also increases, which could happen if the demand for labor increases more than the supply, or if the supply curve shifts in a manner that intersects a higher point on the demand curve.