In a labor market without an efficiency wage,minimum wage,or union wage,when the real wage rate exceeds the equilibrium real wage rate,there is a ________ of labor and the real wage rate will ________.

Question

Quizplus · Accepted Answer

When the real wage rate exceeds the equilibrium real wage rate, it means that wages are higher than what the market or employers can afford to pay for labor. This creates a surplus of labor because there are more workers willing to offer their labor services than there are employers willing to pay for them. To reduce the surplus of labor, some workers may lower their wage demands, which would cause the real wage rate to fall. This adjustment will continue until the real wage rate equals the equilibrium level, at which point the surplus of labor will disappear.

In a Labor Market Without an Efficiency Wage,minimum Wage,or Union