If there is a change in the supply of labour there is no change to the earnings from capital and land.

Question

Quizplus · Accepted Answer

Changes in the supply of labor can affect the distribution of income between labor and other factors of production such as capital and land. For example, an increase in labor supply could potentially lower wages if demand for labor does not match the increase, potentially increasing the returns to capital and land owners if they can produce more with the same capital and land inputs at lower labor costs. Conversely, a decrease in labor supply could increase wages, potentially reducing returns to capital and land if the cost of labor increases.

If There Is a Change in the Supply of Labour