Assume that a country experiences a reduction in productivity that lowers the marginal product of labour for any given level of labour. In this case, the:
A)labour supply curve shifts to the right.
B)labour supply curve shifts to the left.
C)labour demand curve shifts upward and to the right.
D)labour demand curve shifts downward and to the left.

Question

Quizplus · Accepted Answer

A reduction in productivity decreases the marginal product of labour, leading firms to demand less labour at each wage level, causing the labour demand curve to shift downward and to the left.

Assume That a Country Experiences a Reduction in Productivity That