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Labor Markets and Employment
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What is the relationship between labor supply and the wage rate?
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A
Labor supply is positively related to the wage rate.
💡 Explanation:
The law of supply states that, all other things being equal, the quantity supplied of a good or service is positively related to its price. In the case of labor, the wage rate is the price of labor, and the quantity supplied of labor is the number of workers willing and able to work at that wage rate. Therefore, labor supply is positively related to the wage rate.