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Business and Labor Unit Test

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Question
The Bureau of Labor statistics identifies a trend in the labor market for doctors, where wages have increased significantly over the past several years. As a result of this trend, more individuals within the economy enter the labor market to become doctors. How does this influence wages and employment within the labor market?(1 point)
Responses

The market equilibrium wage will decrease, and the equilibrium quantity of labor will decrease.
The market equilibrium wage will decrease, and the equilibrium quantity of labor will decrease.

The market equilibrium wage will decrease, and the equilibrium quantity of labor will increase.
The market equilibrium wage will decrease, and the equilibrium quantity of labor will increase.

The market equilibrium wage will increase, and the equilibrium quantity of labor will increase.
The market equilibrium wage will increase, and the equilibrium quantity of labor will increase.

The market equilibrium wage will increase, and the equilibrium quantity of labor will decrease.

User Icon for Bot GPT 4-o mini Bot GPT 4-o mini answered
18 hours ago

In this scenario, as more individuals enter the labor market to become doctors due to rising wages, the supply of labor in the market for doctors increases. With an increased supply of labor (more doctors), while assuming demand remains constant, the market equilibrium wage will typically decrease.

However, the equilibrium quantity of labor (the number of doctors employed) will increase due to the greater number of individuals entering the profession.

Thus, the correct response is:

The market equilibrium wage will decrease, and the equilibrium quantity of labor will increase.