📚 Learning Guide
Understanding Labor Demand Shifts
hard

Which of the following factors is most likely to cause a leftward shift in the labor demand curve for a specific industry?

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Learning Path

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Choose the Best Answer

A

Increased automation and technological advancements

B

A rise in consumer income

C

A decrease in the price of the product produced by the industry

D

Increased education and training for workers

Understanding the Answer

Let's break down why this is correct

Answer

A leftward shift in the labor demand curve means that employers want to hire fewer workers at every wage level. This can happen for several reasons, but one common cause is a decrease in the demand for the products that the industry produces. For example, if a factory makes toys and there is suddenly less interest in buying toys due to a new trend, the factory may need fewer workers to meet the lower demand. When businesses expect to sell less, they often reduce their workforce to cut costs, leading to a leftward shift in the labor demand curve. In this way, changes in consumer preferences or market conditions can directly affect how many employees a company needs.

Detailed Explanation

When companies use more machines and technology, they need fewer workers. Other options are incorrect because Some might think that when people have more money, companies need more workers; It's easy to think that lower prices mean companies need more workers.

Key Concepts

demand shifts
factors influencing labor demand
technological change
Topic

Understanding Labor Demand Shifts

Difficulty

hard level question

Cognitive Level

understand

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