If the demand for labor decreases,then the equilibrium wage rate ________ and the equilibrium quantity of labor ________.
A) falls; increases
B) might rise, fall, or not change; increases
C) rises; might increase, decrease, or not change
D) falls; decreases
E) falls; does not change

Question

Quizplus · Accepted Answer

If the demand for labor decreases, then there will be fewer job opportunities and employers will lower their offers for wages. As a result, the equilibrium wage rate will fall. Additionally, since there are fewer job opportunities, the equilibrium quantity of labor will also decrease as job seekers find it more difficult to find work. Therefore, the best choice is D.

If the Demand for Labor Decreases,then the Equilibrium Wage Rate