Question

if the wage rate decreases from $14.00 per hour to $13.00 per hour, theselect one:a. equilibrium quantity of employment must decrease.b. the labour supply curve shifts to the right.c. quantity supplied of labour increases.d. labour demand curve shifts to the right.e. quantity demanded of labour increases.

Answer 1

A wage rate decrease from $14.00 to $13.00 per hour leads to an increase in the quantity demanded of labour, in line with how employers respond to lower wages by hiring more workers.

Step-by-step explanation:

When the wage rate decreases from $14.00 per hour to $13.00 per hour, the quantity demanded of labour increases. This is because employers are more likely to hire additional employees at a lower wage, assuming other factors remain constant (ceteris paribus). According to the demand curve for labor, a reduction in wages results in a movement downward along the demand curve, indicating an increase in the quantity of labor that employers wish to hire. None of the other options, such as the labour supply curve shifting to the right or increase in quantity supplied of labor, inherently result from a wage decrease. Shifts in the demand or supply curve itself would be caused by factors other than a change in the price of labor.