Why Is a Rightward Shift of the Labor Supply Curve

question 17

Multiple Choice

Why is a rightward shift of the labor supply curve difficult to rationalize in the classical model?

• A) The labor supply curve is based on firms' preferences.
• B) Labor supply is very difficult to measure.
• C) The labor supply curve is almost never a known entity.
• D) Workers' preferences and therefore labor supply tend to change very slowly.
• E) Workers' preferences and therefore labor supply tend to change very quickly.

---

Definitions:

Variable Rate

An interest rate that can change over time, often based on an underlying benchmark interest rate or index that reflects the cost of borrowing in the credit markets.

Forward Contract

An agreement that isn't standardized between two parties to purchase or sell an asset at a future date determined today at a price agreed upon today.

Legally Binding

An agreement enforceable by law, with obligations that must be fulfilled by all parties involved.

Agreed-upon Price

The price that has been mutually accepted by the buyer and seller in a transaction.