Asked by Kiana Despabiladero on May 02, 2024
Verified
In some remote communities, there was only one employer in the local labor market several years ago, but the number of firms that hired workers in the market increased over time. What is the expected change in the local labor market as the number of employers increased (ceteris paribus) ?
A) Wages and employment increase.
B) Wages remain the same but employment increases.
C) Wages increase but employment remains the same.
D) Wages and employment decline.
Ceteris Paribus
Ceteris paribus is a Latin term used in economics meaning "all other things being equal," employed to isolate the effect of one variable by assuming that other variables remain constant.
Number of Employers
The total count of individuals or entities that hire employees to perform specific jobs.
Local Labor Market
The supply of and demand for labor within a specific area, affecting employment opportunities, wage levels, and working conditions.
- Recognize how the introduction of multiple employers affects wages and employment in previously monopsonistic markets.
Verified Answer
Learning Objectives
- Recognize how the introduction of multiple employers affects wages and employment in previously monopsonistic markets.
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