Refer to the above graph. An increase in the quantity of labor demanded (as dist
ID: 1186922 • Letter: R
Question
Refer to the above graph. An increase in the quantity of labor demanded (as distinct from an increase in demand) is shown by the: shift from labor demand curve D1 to D2. shift from labor demand curve D3 to D2. move from a to b along labor demand curve D1. move from b to a along labor demand curve D1. Refer to the above graph. Other things equal, an increase in the price of a complementary resource would cause a(n): move from a to b on D1. shift from D2 to D3.assuming the output effects exceeds the substitution effect. shift from D3 to D2 assuming the output effects exceeds the substitution effect move from b to a on D1.Explanation / Answer
8C-- A CHANGE IN THE PRICE OF COMMODITY ( here the wage rate) LEADS TO A CHANGE IN QUANTITY DEMANDED. IT RESULTS IN A MOVEMENT ALONG THE DEMAND CURVE .ie. FROM a to b. MOVEMENT ALONG THE DEMAND CURVE OCCURS WHEN THE PRICE OF COMMODITY CHANGES , WITH OTHER DETERMINANTS OF DEMAND( LIKE INCOME , AND TASTES AND PREFRENCES, AND PRICE OF RELATED GOODS HELD CONSTANT)
IT MEANS THE CHANGE IN THE QNANTITY DEMANDED IS DUE TO THE CHANGE IN THE PRICE OF THAT PARTICULAR GOOD. IT RESULTS IN MOVEMENT ALONG THE DEMAND CURVE.
WHEN THERE IS DECREASE IN THE PRICE THAT IS WAGE RATE THE QUANTITY DEMANDED INREASES. SO THERE IS MOVEMENT ALONG THE DEMAND CURVE FROM a to b.
9C--LETS TAKE THE EXAMLE OF PETROL BEING THE COMLEMENTRY GOOD OF CAR. WITH RISE IN PRICE OF PETROL, CONSUMER'S DEMAND FOR PETROL DECREASES. THIS RESULTS IN THE DEMAND FOR CARS ALSO DECREASES.
HERE DEMAND HAS DECREASED DUE THE CHANGE IN THE PRICE OF COMPLIMENTRY GOOD, NOT DUE THE PRICE OF THE THE GOOD ITSELF. THERE IS SHIFT IN THE DEMAND CURVE TO LEFT SIDE THAT IS FROM D3 TO D2
10C-- A DECREASE IN THE PRICE OF SUBSTITUTE (ORANGES) WOULD MAKE CONSUMER DEMAND MORE ORANGES. CONSUMETR WOULD SUBSTITUTE THE CHEAPER ORANGES FOR THE RELATIVELY MORE EXPENSIVE APPLES.
HENCE THERE IS DECREASE THE DEMAND OF THE COMMODITY DUE TO CHANGE IN THE PRICE OF SUBSTITUTE GOOD AND NOT BECAUSE OF THE CHANGE IN PRICE OF THAT PARICULAR GOOD ITSELF THAT IS APPLES. HENCE THERE DECREASE IN THE DEMAND OF THE GOOD. SO THE DEMAND CURVE SHIFTS FROM D3 TO D2