Given an Increase in the Demand for Labor, the More

question 25

Multiple Choice

Given an increase in the demand for labor, the more the supply of labor rises:

• A) the greater the increase in wages.
• B) the less the increase in wages and the greater the number of workers employed.
• C) the greater the increase in workers employed at the original wage rate.
• D) the fewer the number of workers employed.

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Definitions:

Price Ceiling

A government-imposed limit on how high a price can be charged on a product or service, intended to protect consumers.

Market Price

The amount of money a buyer is willing to pay and a seller is willing to accept for a good or service in a competitive market.

Shortage

A market condition in which the demand for a product or service exceeds its supply, often leading to higher prices.

Binding Price Ceiling

A government-imposed price limit on goods or services that is set below the market equilibrium price, leading to shortages.