the work ethic of the country's workers worsens over time resulting in a significant reduction in labour productivity. What will be the results of this change?
the work ethic of the country's workers worsens over time resulting in a significant reduction in labour productivity. What will be the results of this change?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:The labour market in a particular country is characterized by the diagram below. The country's
original demand and supply curves for labour are represented by D, and S, respectively. Suppose
the work ethic of the country's workers worsens over time resulting in a significant reduction in
labour productivity. What will be the results of this change?
Real wage ratel
Wo
Do
D2
L2 Lo 4
Quantity of Labour
Select one:
A. Employment and the real wage rate will remain unchanged
B. Employment will increase to L1 and the real wage rate will rise to W1
C. Employment will decrease to L2 and the real wage rate will fall to W2
D. Employment will decrease to L2 but the real wage rate will fall to W1
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