If labor demand is downward sloping and labor supply is upward sloping, then when labor demand rises faster than labor supply, it is expected that real wages __________.
A. will stay the same
B. will decrease
C. will increase
D. may increase, decrease or stay the same depending on the relative slopes.
Answer:C
If labor demand is downward sloping and labor supply is upward sloping, then when labor demand rises faster than labor supply, it is expected that real wages __________.
A. will stay the same B. will decrease C. will increase D. may increase, decrease or stay the same depending on the relative slopes.
Explanation: 15. The labor ____________ curve(s) will shift _______________ if there is an increase in productivity or an increase in the demand for the final product.