Question

What are the three most important variables that cause the market supply curve for labour to​ shift?

The supply curve for labour shifts with changes in

A.

the​ population, the wage rate and opportunities in other labour markets.

B.

the price of the product​, demographics and opportunities in other labour markets.

C.

the​ population, demographics and opportunities in other labour markets.

D.

the​ population, the quantity of other inputs and opportunities in other labour markets

E.

immigration, minimum wage legislation and the wage rate.

Answer 1

The supply curve of labour is an upward sloping curve indicating the total hours that workers are willing to work at the given wage rate.

While a number of factors shift the labour supply curve, wage rate of the labour is the most important factor. The higher the wages, the greater the supply of labour.

Similarly, increase in population leads to an increase in labour supply and opportunities in other labour markets also alter the supply of labour in a particular market.

Ans. (a)