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Chapter 4: Q 16 (page 104)

Name some factors that can cause a shift in the

supply curve in labor markets.

Short Answer

Expert verified

market which depicts the availability of labor, according to demand and supply in market. Here supply is provided by employee and demand is provided by employer.

Step by step solution

01

Step 1. Introduction

supply means the willingness of a firm or the ability to produce a good for consumption purposes in the market. There are different factors explained below that can cause a shift in the supply curve in labor markets.

02

Step 2. Number of workers

First and most basic factor that affect the supply curve is number of workers. Increase number of workers means more productivity which will have a rightward shift in demand curve whereas decrease number of workers will decrease productivity resulting in a leftward shift in supply curve.

03

Step 3. Government policies

If the government policies are in favor of workers like providing them sick leave, maternity leave and bonus and other incentives and no requirement of specific education then it will result in increased number of labor which will result in a rightward shift whereas if government policies are rigid like specific education, low salary and other specific requirements this will lead to disinterest of workers resulting in decrease number eventually a leftward shift in supply curve.

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Most popular questions from this chapter

In the labour market, what causes a movement along the demand curve? What causes a shift in the demand curve?

Suppose the U.S. economy began to grow more rapidly than other countries in the world. What would be the likely impact on U.S. financial markets as part of the global economy?

Whether the product market or the labor market, what happens to the equilibrium price and quantity for each of the four possibilities: increase in demand, decrease in demand, increase in supply, and decrease in supply.

Predict how each of the following economic changes will affect the equilibrium price and quantity in the financial market for home loans. Sketch a demand and supply diagram to support your answers.

  1. The number of people at the most common ages for home-buying increases.
  2. People gain confidence that the economy is growing and that their jobs are secure.
  3. Banks that have made home loans find that a larger number of people than they expected are not repaying those loans.
  4. Because of a threat of a war, people become uncertain about their economic future.
  5. The overall level of saving in the economy diminishes.
  6. The federal government changes its bank regulations in a way that makes it cheaper and easier for banks to make home loans.

Predict how each of the following events will raise or lower the equilibrium wage and quantity of oil workers in Texas. In each case, sketch a demand and supply diagram to illustrate your answer.

a. The price of oil rises.

b. New oil-drilling equipment is invented that is cheap and requires few workers to run.

c. Several major companies that do not drill oil open factories in Texas, offering many well-paid jobs outside the oil industry.

d. Government imposes costly new regulations to make oil-drilling a safer job.
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