Evaluate the statement: “There is no difference between the labor supply curve for the single competitive firm and the supply curve in a competitive market for labor.”
What will be an ideal response?
The statement is incorrect. The labor supply curve for the competitive firm is perfectly elastic at the market wage rate. The firm is usually small relative to the labor market and can employ all the workers it needs at the market equilibrium wage. In contrast, the supply curve for labor in the competitive market will be up sloping because the group of firms in the market must pay higher wages to attract the total number of workers they need in the industry. The higher wages are necessary to bid workers away from alternative employment or to draw them into employment when previously they were not working.
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A(n) ________ is a group of buyers and sellers who are trading goods and/or services
A) firm B) market C) enterprise D) government
Refer to Figure 5-10. One way to obtain the economically efficient amount of chicken pox vaccinations is for governments to subsidize these vaccinations
What is the size of the per-vaccination Pigovian subsidy that the government must provide to internalize the external benefits? A) (PE - PF) B) PE C) (PF - PG) D) (PE - PG)