What Are the General Equilibrium Effects Between Labor Markets and Housing

question 10

Multiple Choice

What are the general equilibrium effects between labor markets and housing markets following an increase in labor demand?

• A) As workers' wages increase, more people move into an area, driving up housing prices. The rising housing prices slow the migration of workers to an area.
• B) An increase in labor demand will cause a larger wage reduction in areas with an elastic housing supply than with an inelastic housing supply.
• C) An increase in labor demand will cause a larger wage increase in areas with an elastic housing supply than with an inelastic housing supply.
• D) An increase in labor demand will cause a larger increase in employment in areas with an inelastic housing supply than with an elastic housing supply.

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Definitions:

Levels of Response

The degrees or stages of reaction or feedback provided in various situations.

Power

The ability or capacity to influence or control the behavior of others, often based on position, resources, or personal traits.

Bases of Power

The foundations from which an individual or group derives their ability to influence others, usually classified into categories like coercive, reward, legitimate, expert, and referent power.

Informal Systems

The unofficial and unwritten ways that an organization operates, including social networks, practices, and norms that influence behavior and decisions.