Suppose that the market for labor is initially in equilibrium. An increase in immigration will cause the equilibrium wage
A)and the equilibrium quantity of labor to rise.
B)and the equilibrium quantity of labor to fall.
C)to rise and the equilibrium quantity of labor to fall.
D)to fall and the equilibrium quantity of labor to rise.

Question

Quizplus · Accepted Answer

An increase in immigration increases the supply of labor. According to basic economic principles, an increase in supply, with demand remaining constant, leads to a decrease in price (wage, in this case) and an increase in the quantity consumed (quantity of labor employed, in this case).

Suppose That the Market for Labor Is Initially in Equilibrium