Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The demand for labor will increase because higher productivity makes hiring more workers beneficial.
B
The demand for labor will decrease since fewer workers are needed due to automation.
C
The demand for labor will remain unchanged as productivity does not influence hiring decisions.
D
The demand for labor will fluctuate unpredictably as productivity changes.
Understanding the Answer
Let's break down why this is correct
Answer
When a company introduces new technology that boosts worker productivity, it often needs fewer workers to produce the same amount of goods or services. This happens because the technology allows existing employees to work more efficiently, meaning the company can achieve its goals with a smaller workforce. As a result, the demand for labor at the company may decrease, leading to fewer job openings. For example, if a factory uses a new machine that speeds up production, it may only need half the number of workers to operate it effectively. This situation illustrates a shift in labor demand, as the company now requires less labor due to the increased efficiency brought by technology.
Detailed Explanation
When workers are more productive, the company can produce more with the same number of workers. Other options are incorrect because Some might think that if machines do more work, fewer workers are needed; It's a common belief that productivity changes don't affect hiring.
Key Concepts
Labor Demand Shifts
Productivity
Employment Levels
Topic
Understanding Labor Demand Shifts
Difficulty
hard level question
Cognitive Level
understand
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