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Author Question: According to the law of supply: a. there is an inverse relationship between price and quantity ... (Read 135 times)

Mollykgkg

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According to the law of supply:
 a. there is an inverse relationship between price and quantity demanded.
  b. there is a direct relationship between price and quantity demanded.
 c. there is an inverse relationship between price and the quantity supplied.
  d. there is a direct relationship between price and the quantity supplied.

Question 2

Discuss the impact of efficiency wages on unemployment and wage inflexibility.



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srodz

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Answer to Question 1

d

Answer to Question 2

Because the efficiency wage rate is greater than the equilibrium wage rate, the quantity of labor that would be willingly supplied is greater than the quantity of labor demanded, resulting in greater amounts of unemployment. However, aside from creating some additional unemployment, the efficiency wage could also cause wages to be inflexible downward.




srodz

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