Question

In: Economics

Imagine many technical workers can now earn more income working from home for themselves over the...

Imagine many technical workers can now earn more income working from home for themselves over the internet rather than working for a firm. Which of the following is mostly likely to be a consequence for the remaining labor market for technical workers (the market in which firms hire workers)?

Group of answer choices

A decrease in the wage of technical workers employed by firms and an increase in the number of employed technical workers.

An increase in the wage of technical workers employed by firms and a decrease in the number of employed technical workers.

A decrease in the wage of technical workers employed by firms and a decrease in the number of employed technical workers.

An increase in the wage of technical workers employed by firms and an increase in the number of employed technical workers.

Solutions

Expert Solution

Answer : The answer is option B.

If workers earn more by working internet then the number of employed technical workers in firms will decrease. Because workers will prefer more to do work by internet. As a result, the labor supply will decrease which will increase the wage rate. Therefore, option B is correct.


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