The demand for labor is different from the demand for final goods and services because
A)the demand for labor is derived from the demand for the good or service the labor is used to produce.
B)it is a demand for people, not inanimate objects.
C)the demand for labor is more inelastic than the demand for the goods and services produced with this labor.
D)the law of demand does not apply to the demand for labor.

Question

Quizplus · Accepted Answer

The demand for labor is derived from the demand for the goods or services that the labor is used to produce. In other words, when there is an increase in demand for a product or service, there is an increase in demand for the labor needed to produce that product or service. This means that the demand for labor is indirectly determined by the demand for final goods and services. Therefore, option A is the correct answer. Option B is incorrect because while it is true that the demand for labor is for people, that alone does not make it different from the demand for final goods and services. Option C is also incorrect because the elasticity of demand differs across goods and services and the demand for labor, and it cannot be assumed that the demand for labor is more or less inelastic than the demand for goods and services produced using labor. Option D is incorrect because the law of demand, which states that as the price of a good or service increases, the quantity demanded decreases (all else being equal), applies to the demand for labor as well.

The Demand for Labor Is Different from the Demand for Final