Question

What would be the slope of the labour supply curve if there is large scale involuntary unemployment in the economy, if wage rate is measured along the vertical axis and labour supply is measured along the horizontal axis?

• A. Horizontal.
• B. Vertical.
• C. Positively sloped.
• D. Negatively sloped.

Hint:

Think about how unemployment affects labor supply.

Answer 1

The Correct Option is A

In the case of large-scale *involuntary unemployment*, the labour supply curve is horizontal because the wage rate does not affect the quantity of labour supplied.

Therefore, the correct answer is (a).