Without any change in the demand for labor, how will shifts in the supply of labor affect equilibrium wage and employment?
What will be an ideal response?
Because the equilibrium wage and employment are determined at the point of intersection of the labor demand and supply curves, shifts in the supply curve affect these variables. A right shift in the supply of labor, without any change in the demand for labor, will lead to lower wages and a higher employment level. On the other hand, a left shift in the supply of labor, without any change in the demand for labor, will lead to higher wages and a lower employment level.
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a. true b. false
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