Which of the following increases in labor demand is due to a change in the price of a related resource?
A) Software sales rise, thus increasing the demand for software developers.
B) Snowboarding increases in popularity, thus increasing the demand for the workers who make snowboards.
C) A decrease in the price of wood decreases the cost of furniture, thus increasing the demand for furniture workers.
D) A technological change increases output per worker in the computer industry, thus increasing the demand for computer workers.

Question

Quizplus · Accepted Answer

A decrease in the price of wood will decrease the cost of production for furniture, thus leading to an increase in the demand for furniture workers who can produce more at a lower cost. This is an example of a change in the price of a related resource (wood) that affects the demand for labor in another industry (furniture).

Which of the Following Increases in Labor Demand Is Due