Which of the following events could increase the demand for labor?
A)A decrease in output price
B)A decrease in the amount of capital available for workers to use
C)An increase in the marginal productivity of workers
D)A decrease in the wage paid to workers

Question

Quizplus · Accepted Answer

An increase in the marginal productivity of workers would make each worker more valuable and increase the demand for labor, as firms seek to hire more workers to take advantage of their increased productivity. A decrease in output price (A) or wage paid to workers (D) would generally decrease demand for labor, as firms would be less incentivized to hire workers if they are earning less revenue or if labor costs are lower. A decrease in the amount of capital available for workers to use (B) might also decrease demand for labor if it means that workers have less equipment or technology to work with, which could reduce their productivity and make them less valuable to firms.

Which of the Following Events Could Increase the Demand for Labor