Question

If the real wage rises:

A. the marginal cost of labor falls.
B. firms will hire additional labor.
C. the marginal benefit of the worker increases.
D. firms will hire less labor.

Answer 1

D firms will hire less labor

Answer 2

Answer: Firms will hire less labor

Step-by-step explanation: The demand curve for labor is downward sloping showing an inverse relationship between real wage (w/p) and quantity of labor demanded. Thus, when real wage rises, demand for labor falls. This means that at high real wages the firm will hire less labor.