2 3 Involuntary unemployment occurs when the wage rate is be

2 3 Involuntary unemployment occurs when the wage rate is below the equilibrium wage rate. exists when there is an excess quantity of labor supplied. will increase as the wage rate falls. exists when there is a shortage of tabor. PreviousSkip Save Next form/quiz/student.html? operationz startguiz# 2017 17-34:33 7:10 S0 PM MST ch

Solution

Involuntary unemployment is a situation where people are willing to work at the existing wage rate but are not able to find jobs at that rate. This means that at the exisiting wage rate, the quantity of labour supplied is greater than the quantity of labour demanded , the difference between labour supply and labour demand being equal to involntary unemployment. Thus the correct option is:

option 2: Involuntary unemployment exists when there is an excess quantity of labour supplied.