Which of the following factors is least likely to affect the supply of labor? A) Wages offered. B) The size of the adult population. C) The accumulation of capital. D) The aggregate requirement for labor. Your answer: C was incorrect. The correct answer was D) The aggregate requirement for labor. Wages, the size of the adult population (i.e., the available labor force), and the accumulation of capital are all factors that affect the supply of labor. The aggregate requirement for labor is a demand issue that will ultimately help to determine the equilibrium level of wages and quantities offered. Can someone help me with the reasoning why C is wrong and D is right?
I’ll take a stab at this… A) AFFECTS LABOR - higher wages increases labor supply; lower wages decreases it (substitution effect) B) AFFECTS LABOR - number of people in the population affects supply of labor C) AFFECTS LABOR - This is a bit tough, but if machinery is a substitute for labor, then more machinery (capital) reduces a company’s need for labour, which will ultimate increase the supply of it. It’s a bit of a stretch… but that was my interpretation of it. D) Does NOT affect labour - for the same reason in the answer. The number people a firm wants to hire has minimal impact on those applying for that position