Which of the following would cause the equilibrium wage rate to increase and the equilibrium quantity of labor to decrease?(1 point)

Question

Responses

a decrease in the labor demand
a decrease in the labor demand

an increase in the labor supply
an increase in the labor supply

an increase in the labor demand
an increase in the labor demand

a decrease in the labor supply

Answer 1

The correct response is: a decrease in the labor supply.

When there is a decrease in the labor supply, the equilibrium wage rate tends to increase because there are fewer workers available for the same amount of jobs. However, the equilibrium quantity of labor will decrease because there are less workers willing to work at the new higher wage rate.