If Labor Supply and Labor Demand Both Increase,employment

question 56

Multiple Choice

If labor supply and labor demand both increase,employment

• A) and the real wage rate will both increase
• B) will increase but the real wage rate will fall
• C) will increase but the real wage rate will remain constant
• D) and the real wage rate will remain constant
• E) will increase but the effect on the real wage rate will depend on the magnitude of the shifts

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Definitions:

Willingness To Pay

The maximum amount an individual is prepared to spend to procure a good or service, reflecting the value they place on it.

Expected Revenue

The total amount of money anticipated to be received for goods or services sold, calculated over a specific period.

Probability

A measure of the likelihood that a particular event will occur.

Reservation Price

The maximum amount a buyer is willing to pay for a good or service or the minimum amount a seller is willing to accept.