When the productivity of workers increases, the demand for labor typically shifts to the right due to an increase in ________, which affects a firm's hiring decisions.

When the productivity of workers increases, it means that each worker can produce more goods or services in the same amount of time. This higher productivity usually leads to an increase in the value of what workers can create, which is often referred to as an increase in labor productivity. As a result, firms are willing to hire more workers because they expect to earn more money from the additional output. For example, if a factory introduces new technology that allows workers to produce twice as many products, the factory will likely need to hire more workers to keep up with the increased demand for those products. Therefore, the demand for labor shifts to the right, meaning more workers are needed due to the higher productivity levels.