Suppose the Supply of Labor Schedule Decreases in a Perfectly

question 160

Multiple Choice

Suppose the supply of labor schedule decreases in a perfectly competitive labor market while the market demand schedule remains unchanged. A profit-maximizing representative firm will

• A) hire more workers.
• B) hire less workers.
• C) hire the same number of workers.
• D) substitute capital for labor.

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Definitions:

Primary Market

The financial market where new securities are issued and sold for the first time, often via initial public offerings (IPOs).

OTC Market

Over-The-Counter Market; a decentralized market where securities not listed on formal exchanges are traded directly between parties.

Sole Proprietorship

A company controlled and managed by one person, with the individual and the company being legally regarded as the same entity.

General Partnership

A type of business partnership where all partners share both profits and liabilities equally unless a different arrangement is agreed.