What is the expected outcome when there is a reduction in the supply of labor?

Show Answers

A decrease in the equilibrium wage accompanied by a drop in labor quantityA decline in the equilibrium wage with an increase in labor quantityAn increase in the equilibrium wage along with a rise in labor quantityAn increase in the equilibrium wage coupled with a decrease in labor quantityNo change in equilibrium wage but a reduction in labor quantity

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.