Figure 15-2

-Refer to Figure 15-2.Ceteris paribus,a decrease in the size of the labor force would be represented by a movement from
A) SRAS₁ to SRAS₂.
B) SRAS₂ to SRAS₁.
C) point A to point B.
D) point B to point A.

Question

Figure 15-2
 
-Refer to Figure 15-2.Ceteris paribus,a decrease in the size of the labor force would be represented by a movement from
A) SRAS₁ to SRAS₂. 
B) SRAS₂ to SRAS₁. 
C) point A to point B. 
D) point B to point A.

Quizplus · Accepted Answer

A decrease in the size of the labor force would cause a decrease in production capacity and increase in production costs, leading to a leftward shift of the supply curve from SRAS₁ to SRAS₂. Therefore, the correct option is B, which indicates a movement from SRAS₂ to SRAS₁.

Figure 15-2 -Refer to Figure 15-2.Ceteris Paribus,a Decrease in the Size of in the Size