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The demand curve for labor would shift leftward as the result of-

A. an increase in the price of the product labor is producing
B. a decrease in the productivity of labor
C. an increase in the price of labor
D. A decrease in the price of capital, provided the output effect exceeds the substitution effect

User Solomon
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Final answer:

The demand curve for labor shifts leftward when productivity decreases or when capital becomes less expensive and companies use more capital instead of labor.

Step-by-step explanation:

The student is asking about the factors that can cause the demand curve for labor to shift leftward. Option B, a decrease in the productivity of labor, would directly reduce the value of labor to employers, causing the demand curve to shift left. A decrease in productivity means each worker produces less output, lessening the demand for their services at any given wage rate. Meanwhile, option D suggests that a decrease in the price of capital, if the output effect exceeds the substitution effect, may lead to a greater use of capital instead of labor, thus reducing the demand for labor. Essentially, if capital becomes cheaper and more cost-effective than labor, companies may substitute labor with capital goods.

User Dan Kelly
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