Question

Which of the following will not shift the demand curve for labor?

A. The use of a larger stock of capital within the labor force
B. A change in the wage rate
C. An increase in the price of the product which labor is helping to produce
D. The adoption of a more efficient method of combing labor and capital in the production process

Answer 1

The adoption of a more efficient method of combining labor and capital in the production process will not shift the demand curve for labor.

Step-by-step explanation:

A change in the wage rate (the price of labor) causes a movement along the demand curve for labor. However, out of the options provided, the adoption of a more efficient method of combining labor and capital in the production process will not shift the demand curve for labor.

When firms adopt a more efficient method of combining labor and capital, it improves their productivity and reduces costs. This may result in an increased demand for labor to meet the higher production levels.

However, this does not cause a shift in the demand curve for labor because it does not directly affect the quantity demanded of the product that the labor produces, the production process that uses more or less labor, or government policy that affects the quantity of labor that firms wish to hire at a given wage.