Assuming all else equal,if the labor demand curve shifts to the left and the labor supply curve remains unchanged,________.
A) the equilibrium wage rises
B) the equilibrium wage falls
C) unemployment rises
D) the marginal product of labor rises

Question

Quizplus · Accepted Answer

A leftward shift in the labor demand curve indicates a decrease in demand for labor. This means that there will be excess supply of labor in the market, leading to a decrease in the equilibrium wage rate. The decrease in demand for labor also implies a decrease in the marginal product of labor, which means the employers will be willing to hire fewer workers at lower wages. As a result, unemployment will rise in the economy.

Assuming All Else Equal,if the Labor Demand Curve Shifts to the Left