1. Which of the following factors would likely lead to an increase
in the demand for labor in a market?
A. A decrease in the wage rate
B. An increase in the price of capital
C. A decrease in the demand for the final product
D. An increase in the productivity of labor
Correct answer: D. An increase in the productivity of labor
Rationale: An increase in the productivity of labor would likely
lead to an increase in the demand for labor as firms seek to hire
more workers to take advantage of the increased output.
2. Which of the following factors would likely lead to a decrease
in the supply of labor in a market?
A. An increase in wages
B. An increase in the population
C. An increase in the availability of education and training
programs
D. An increase in the number of job vacancies
Correct answer: A. An increase in wages
Rationale: An increase in wages would likely lead to a decrease in
the supply of labor as individuals may choose to work fewer
hours or drop out of the labor force altogether if they can earn
enough with fewer hours.
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