Question

Which of the following events could increase the demand for labor?a. An increase in the marginal productivity of workers b. A decrease in the amount of capital available for workers to use c. A decrease in the wage paid to workers d. A decrease in output price

Answer 1

Answer: Option A

Explanation: Marginal productivity of labor can be defined as the increase or decrease in the level of output by employing one more unit of labor.

If the marginal productivity of labor increases the output of the firms will increase also, leading to profit of suppliers. If the profit of suppliers increase due to labor input factor they would demand more of it.