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- Subject
- Labour Marketeconomics-mcqs › labour-market
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
In a perfectly competitive labor market, where firms accept the wage as given, what does the marginal cost of labor equal?
Multiple choice question for Labour Market. Select an option, then review the explanation below.
Explanation
In a perfectly competitive labor market, firms are wage takers, so the marginal cost of hiring an additional worker equals the total cost of labor, which is the wage rate multiplied by the number of workers. Therefore, the marginal cost of labor corresponds to the total labor cost.
More Labour Market MCQs
Practice related questions from the same subject.
- 1.How do unions typically contribute to widening the wage gap between union members and non-union workers?
- 2.Under which circumstance can unions enhance efficiency?
- 3.Which of the following reasons explains why companies might choose to pay efficiency wages?
- 4.Which of the following government actions is least likely to decrease the unemployment rate?
- 5.What happens if the wage rate is set above the competitive equilibrium wage for any reason?