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Which of the following statements is true?

1) All workers are willing to work at the equiLiBrium wage rate
2) At all wages below the equiLiBrium wage rate, labor supplied exceeds labor demanded.
3) At all wages above the equiLiBrium rate, labor demanded equals zero.
4) Some workers may be willing to work only at a wage rate above the equiLiBrium wage rate.

1 Answer

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Final answer:

The true statement about labor markets is that some workers may be willing to work only at a wage rate above the equilibrium wage rate. The market-determined equilibrium wage is where labor demand meets supply, and wages above this point can lead to excess supply of labor, not an elimination of labor demand.

Step-by-step explanation:

In the context of labor markets, the statement that is true is: Some workers may be willing to work only at a wage rate above the equilibrium wage rate. The equilibrium wage is determined by the intersection of labor demand (D) and labor supply (S). When wage rates are below the equilibrium, labor supplied generally exceeds labor demanded, but it does not imply that all workers are willing to work at rates below the equilibrium.

If a wage is set above the equilibrium, there's an excess supply of labor because fewer jobs are available at that rate, which doesn't mean that labor demanded equals zero but rather that it's reduced compared to the equilibrium quantity. In competitive labor markets, not all workers may be satisfied with the equilibrium wage and some may opt to seek higher wages or better conditions before entering the job market.

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