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UI Post-UTME Economics 2023 (Model questions) Question 15

Question 15

Labour Market

If the real wage is above, the equilibrium level is the labour market then, the ________

  1. A.the quantity demanded of labour is higher than the quantity supplied
  2. B.the quantity demanded of labour equals the quantity supplied
  3. C.the quantity demanded of labour is lower than the quantity supplied
  4. D.the real image will automatically rise in the short run to bring about equilibrium
Show the answer and explanation

Answer: C (the quantity demanded of labour is lower than the quantity supplied)

Explanation

A wage above equilibrium attracts more workers but employers hire fewer, so labour supplied exceeds labour demanded.