Related to the Economics in Practice on page 222: If labor productivity increases and the supply of labor increases, the equilibrium wage rate
A) will increase.
B) will decrease.
C) will remain constant.
D) may increase, decrease, or remain constant.

Question

Quizplus · Accepted Answer

Labor productivity and supply of labor are important determinants of the wage rate. An increase in labor productivity increases the demand for labor, which tends to increase the wage rate. However, an increase in the supply of labor tends to decrease the wage rate. Therefore, the equilibrium wage rate may increase, decrease, or remain constant depending on the magnitude and direction of these two factors.

Related to the Economics in Practice on Page 222: If