The Demand for Labor Curve Slopes Downward Because

question 154

Multiple Choice

The demand for labor curve slopes downward because

• A) it takes more workers to produce more output.
• B) the value of marginal product of labor diminishes as the quantity of labor employed increases.
• C) at lower wages, people are not willing to work as many hours.
• D) wages are fixed.
• E) the supply of labor curve is upward sloping.

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Definitions:

Producer Surplus

The variation between the price that sellers expect to receive for a product or service and the actual price they end up getting.

Consumer Surplus

The difference between the maximum amount that consumers are willing to pay for a good or service and the amount they actually pay.

Consumer Surplus

The benefit obtained by consumers because they are able to purchase a product for a price that is less than the maximum price that they are willing to pay.

Equilibrium Price

The rate at which the amount of products offered matches the amount of products consumers want.