Why Does the Labor Market Have More Than One Equilibrium

question 15

Multiple Choice

Why does the labor market have more than one equilibrium wage rate?

• A)Workers differ in their productivities.
• B)Productivity of the workers initially increase but later decline.
• C)The labor demand curve is backward bending.
• D)Marginal revenue product of the different inputs used by firms vary.
• E)Employers compete among themselves to hire the best workers.

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Definitions:

Satisficing

A decision-making strategy that involves selecting an option that meets a minimum level of satisfaction, rather than optimizing outcomes.

Alternative

A distinct option or choice among multiple possibilities.

Conscious Reasoning

The deliberate use of logic and rational thinking in making decisions or solving problems, typically involving awareness and reflective thought.

Intuition

The skill to comprehend or perceive something right away, bypassing the process of conscious deliberation.