The labour supply for an industry would decrease if
A)the wage rate falls.
B)the percentage of the population from age 16 to 65 decreases.
C)the government welcomes foreign workers into the country.
D)a greater percentage of women want to work outside the home.

Question

Quizplus · Accepted Answer

The labour supply for an industry is affected by the size of the potential workforce. If the percentage of the population from age 16 to 65 decreases, there will be fewer people available to work, leading to a decrease in the labour supply.

Answer A is incorrect because, according to the law of supply, as the wage rate falls, the quantity of labour supplied increases. Therefore, a decrease in the wage rate would lead to an increase in the labour supply.

Answer C is incorrect because allowing foreign workers into the country would increase the labour supply.

Answer D is incorrect because an increase in the percentage of women wanting to work outside the home would increase the labour supply.

The Labour Supply for an Industry Would Decrease If