Answer to Question #227806 in Macroeconomics for Boity

Question

which of the following statements are correct ?

i) Ceteris paribus, as the real wage rate increases, the quantity of labour demanded increases

ii) An increase in the working age population results in an increase in the supply of labour

iii) A change in the real wage rate brings a movement along the labour supply curve

iv) the demand for labour is determined by the diminishing returns to labour

A. Only (i), (ii) and (iv) are correct

B. Only (ii), (iii) and (iv) are correct

C. Only (i) and (iii) are correct

D. Only (i), (iii) and (iv) are correct

Answer 1

An increase in the working age population results in an increase in the supply of labour

A change in the real wage rate brings a movement along the labour supply curve

the demand for labour is determined by the diminishing returns to labour. Therefore

. Only (ii), (iii) and (iv) are correct