Question

multiple choice question
firms that want to hire workers must pay ______ wage rates to attract them away from the alternative job opportunities available to them.
o equilibrium
o competitive
o lower
o equal
o higher

Explanation:

In a labor market, workers have alternative job opportunities. To attract workers away from these alternatives, firms need to offer an incentive. Wage is a key factor. If a firm pays a higher wage rate than the alternatives, it becomes more attractive to workers. Equilibrium wage is the market - clearing wage (not necessarily attractive enough to pull workers from alternatives). Competitive wage might be similar to others. Lower or equal wages would not entice workers away from other jobs.

Answer:

higher