Question

State whether each of the following events will result in a movement along the market demand curve for labor in electronics factories in China or whether it will cause the market demand curve for labor to shift. If the demand curve shifts, indicate whether it will shift to the left or to the right and draw a graph to illustrate the shift.
The wage rate declines.

b. The price of televisions declines.

c. Several firms exit the TV market in China.

d. Chinese high schools introduce new vocational courses in assembling electronic products

Answer 1

Answer:

A. Movement along the curve.

B. The demand curve shifts to the left

C. The demand curve shifts to the left

D. The demand curve shifts to the right

Explanation:

If the wage rate of labour increases, the quantity of labour demanded would rise. This is in line with the law of demand. The law of demand states that the lower the price, the higher the quantity demanded and the higher the price, the lower the quantity demanded.

If the price of television falls, producers would reduce production levels and some firms might even stop production. If this happens the amount of labour demanded would fall and the demand curve for Labour would shift to the left.

If several firms exit the market, the quantity of labour demanded would fall and the demand curve would shift to the left.

If Chinese high schools introduce new vocational courses in assembling electronic products, more industries would be set up and the demand for Labour would increase, the demand curve for Labour would shift to the right.

I hope my answer helps you