The Labor Demand Curve Slopes Downward Because

question 150

Multiple Choice

The labor demand curve slopes downward because

• A) firms wish to hire fewer workers as the wage rate increases
• B) households wish to hire fewer workers as the wage rate decreases
• C) firms wish to hire more workers as the wage rate increases
• D) firms wish to supply fewer workers as the wage rate increases
• E) households wish to provide fewer hours of work as the wage rate decreases

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Definitions:

Human Capital

The collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value.

Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.

Catch-Up Effect

The theory that poorer economies will tend to grow at faster rates than wealthier ones, allowing them to catch up in terms of income and other economic measures.

Capital

Refers to assets or resources that businesses or individuals use to generate wealth through investment.