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A noted exception to the law of supply is the supply of labour, where at very high wage rates the quantity of labour supplied may actually:
Aincrease more than proportionately
Bstay perfectly constant at all wages
Cfall to zero immediately at any wage
Ddecrease rather than increase
Answer & Solution
Correct answer: D. decrease rather than increase
1. The law of supply predicts more is supplied as price (here, the wage) rises.
2. The source notes an exception in the labour market.
3. At very high wages, workers may choose more leisure, so labour supplied falls.
4. Hence the quantity supplied decreases. 'Fall to zero' overstates the effect.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 2 Unit III "Supply", p.2_
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