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Chapter 4: "Q.1" (page 103)

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

Short Answer

Expert verified

Changeswithin the wage rate (the price of labor) that the causes of a movement along the demand curve

Step by step solution

01

Step.1 Introduction

According to the law of demand, there is an inverse relationship between price of a product and its quantity demanded.

02

Step.2 Explanation

A shift in the demand curve of labor would be caused by a change in the factors affecting demand for labor such as government regulation, price of inputs, etc.

A movement on the labor demand curve is caused by a change in the price of labor or wages.

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