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- Subject
- Labour Marketeconomics-mcqs › labour-market
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
What happens in the labor market when the real wage rate is excessively high?
Multiple choice question for Labour Market. Select an option, then review the explanation below.
Explanation
If the real wage is set too high, the quantity of labor demanded is less than the quantity supplied, causing an imbalance. Equilibrium occurs only when labor demand equals labor supply. Therefore, the correct scenario is that labor demand equals labor supply.
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?