In a perfectly competitive environment,the height of the market labor supply curve at any given number of labor hours indicates:
A)the total cost of employing that number of hours in the given occupation
B)the marginal cost of employing the first hour of labor
C)the value of the alternative activity in which the marginal hour might otherwise be used
D)the maximum wage employers would be willing to pay to attract additional labor

Question

Quizplus · Accepted Answer

In a perfectly competitive environment, the height of the market labor supply curve at any given number of labor hours indicates the value of the alternative activity in which the marginal hour might otherwise be used. This means that if the wage offered to a worker in a given occupation is not enough to compensate for the value they could get from choosing an alternative activity, they will choose the alternative instead of working in the given occupation. Thus, the height of the market labor supply curve represents the opportunity cost of working in the given occupation.

In a Perfectly Competitive Environment,the Height of the Market Labor