Table 18-B
Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day.
-Refer to Table 18-11. Suppose that the firm suffers a loss of some of their technology such as the theft of their industrial mixers. After the theft, MadeFromScratch employees produce fewer cupcakes than they could before because they must mix the cupcake batter by hand rather than using the high-speed mixers. Because of this change, the firm's
A)demand for labor shifts right.
B)demand for labor shifts left.
C)supply of labor shifts right.
D)supply of labor shifts left.

Question

Table 18-B
Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $3 each and pays the workers a wage of $325 per day. 
-Refer to Table 18-11. Suppose that the firm suffers a loss of some of their technology such as the theft of their industrial mixers. After the theft, MadeFromScratch employees produce fewer cupcakes than they could before because they must mix the cupcake batter by hand rather than using the high-speed mixers. Because of this change, the firm's
A)demand for labor shifts right. 
B)demand for labor shifts left. 
C)supply of labor shifts right. 
D)supply of labor shifts left.

Quizplus · Accepted Answer

With the loss of technology, the production process becomes less efficient and the amount of cupcakes that can be produced decreases. This leads to a decrease in the demand for labor, as fewer workers are needed to produce the lower quantity of cupcakes. Therefore, the demand for labor shifts left.

Table 18-B Consider the Following Daily Production Data for MadeFromScratch, Inc. MadeFromScratch