Figure 18-8
This figure below shows the labor market for automobile workers. The curve labeled S is the labor supply curve, and the curves labeled D₁ and D₂ are the labor demand curves. On the horizontal axis, L represents the quantity of labor in the market.

-Refer to Figure 18-8.Which of the following events would most likely explain the shift of the labor-demand curve from D₁ to D₂?

Question

Figure 18-8
This figure below shows the labor market for automobile workers. The curve labeled S is the labor supply curve, and the curves labeled D₁ and D₂ are the labor demand curves. On the horizontal axis, L represents the quantity of labor in the market.
 
-Refer to Figure 18-8.Which of the following events would most likely explain the shift of the labor-demand curve from D₁ to D₂?

Quizplus · Accepted Answer

A technological advance increasing the marginal product of automobile workers would increase the demand for labor, causing the labor-demand curve to shift from D1 to D2. A decrease in automobile prices would likely increase the demand for labor as well, but it would not cause the curve to shift, rather it would lead to a movement along the demand curve. The entrance of a large number of immigrants into the market would increase the supply of labor, leading to a shift of the labor-supply curve, not the demand curve. Thus, only (C) is the correct answer.

Figure 18-8 This Figure Below Shows the Labor Market for Automobile Workers