peo ple to try to find a jol If the money wage rate increase

peo ple to try to find a jol If the money wage rate increased from $20.00 to $24 20 an hour and consumer prices rose by 10 percent, we would expect employed people to want to workhours O A. the same number of, the same number of O B. fewer, shorter O C. fewer, longer O D. more, longer The O A. supply of labor, decrease O B. quantity of labor supplied, increase O C. supply of labor, increase O D. quantity of labor supplied decrease would

Solution

Money wage rate has increased from $20 to $24.20

% increase in money wage rate = [(24.20 - 20)/20] * 100 = 21%

% increase in consumer prices = 10%

% increase in real wage rate = 21% - 10% = 11%

The real wage rate has increased by 11%.

Increase in real wage rate will induce people to work more.

So,

We would expect more people to try to find a job and employed people to want to work longer hours.

Hence, the correct answer is the option (D).

Increase in wage rate leads to increase in quantity supplied of labor.

So,

The quantity of labor supplied would increase.

Hence, the correct answer is the option (B).