Question

Which example shows how changes in supply and demand can change someone's income?

An employer has increased sales and needs to hire another person during lunch hour which increases that person's income.


A gym lays off an employee because it was discovered he lied on his application, so he lost the income from the job.


A health food restaurant surveys a small town but finds there is no demand for health food, so they avoid opening a store there.


An employee returns to work after she has a baby and immediately appreciates the increase in her income.

Answer 1

An employer has increased sales and needs to hire another person during lunch hour which increases that person's income. This is an example of how changes in supply and demand can change someone's income. In this situation, the increase in sales means there is an increase in demand for the employer's products or services. As a result, the employer needs to hire more staff to meet the demand. This leads to an increase in income for the person who is hired.

The other examples given do not relate to changes in supply and demand affecting someone's income. The second example is an issue of employee misconduct leading to job loss, the third example involves the decision to not open a store due to lack of demand, and the fourth example appears to be a general increase in income not related to changes in supply and demand.