Which of the following will cause an increase in the supply of labor in a perfectly competitive labor market?

• A. An increase in immigration of working-age individuals
• B. A reduction in the number of educational opportunities
• C. An increase in the required minimum working age
• D. A decrease in the wage rate

Answer: (A)

Verified step by step guidance

1. Understand that the supply of labor in a perfectly competitive labor market depends on the number of workers willing and able to work at different wage rates.
2. Recognize that an increase in immigration of working-age individuals increases the total number of potential workers, thus shifting the labor supply curve to the right (an increase in labor supply).
3. Analyze how a reduction in the number of educational opportunities might affect labor supply: fewer educational opportunities could mean more people entering the labor force earlier, potentially increasing labor supply, but this effect is indirect and depends on context.
4. Consider that an increase in the required minimum working age restricts younger individuals from working, effectively reducing the labor supply by removing a segment of potential workers.
5. Note that a decrease in the wage rate does not increase labor supply; rather, it typically causes a movement along the labor supply curve, leading to a decrease in quantity of labor supplied, not an increase in supply.