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- Subject
- Labour Marketeconomics-mcqs › labour-market
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
What is the expected outcome when there is a reduction in the supply of labor?
Multiple choice question for Labour Market. Select an option, then review the explanation below.
Explanation
When the supply of labor decreases, fewer workers are available, causing the equilibrium wage to rise due to scarcity. However, the total amount of labor employed falls because fewer workers are willing or able to work at the higher wage.
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?