Without any change in the demand for labor, how will shifts in the supply of labor affect equilibrium wage and employment?
What will be an ideal response?
Because the equilibrium wage and employment are determined at the point of intersection of the labor demand and supply curves, shifts in the supply curve affect these variables. A right shift in the supply of labor, without any change in the demand for labor, will lead to lower wages and a higher employment level. On the other hand, a left shift in the supply of labor, without any change in the demand for labor, will lead to higher wages and a lower employment level.
You might also like to view...
Mexico has lower wages than the United States. Does this necessarily mean that it will have a comparative advantage in the production of everything compared to the United States?
What will be an ideal response?
Suppose Lauren, Leslie and Lydia all purchase bulletin boards for their rooms for $15 each. Lauren's willingness to pay was $35, Leslie's willingness to pay was $25, and Lydia's willingness to pay was $30 . Total consumer surplus for these three would be
a. $15. b. $30. c. $45. d. $90.