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 D 1 and D 2 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 is a possible explanation of 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 D 1  and D 2  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 is a possible explanation of the shift of the labor-demand curve from D1 to D2?

Quizplus · Accepted Answer

An increase in the price of automobiles would increase the demand for automobile workers, leading to a shift of the labor-demand curve from D1 to D2. Option A is incorrect because an increase in the wage earned by automobile workers would lead to a movement along the labor-demand curve, not a shift of the curve. Option C is incorrect because a decrease in the opportunity cost of leisure would lead to a shift of the labor-supply curve, not the labor-demand curve. Option D is incorrect because a change in tastes regarding leisure versus work would affect both the labor-supply and labor-demand curves, so it is unlikely to be the sole explanation for the shift of the labor-demand curve from D1 to D2.

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