Which of the Following Decreases in Labor Demand Is Due

question 169

Multiple Choice

Which of the following decreases in labor demand is due to a change in the price of a related resource?

• A) A decline in the demand for computers in Europe reduces the demand for workers in the domestic computer industry.
• B) The rise of hair salons for both men and women reduces the demand for barbers.
• C) A decrease in the educational skills of manufacturing workers decreases the demand for such workers.
• D) An increase in the price of chemical equipment increases the cost of producing fertilizer, thus decreasing the demand for workers who make fertilizer.

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Definitions:

Labor Costs

The total amount of money businesses have to spend on paying their employees, including wages, salaries, and benefits.

Wage Rates

The amount of money paid per unit of time or output to an employee for labor.

Employment Decline

A reduction in the number of jobs or the rate of employment within an economy.

Economic Profit

The discrepancy between overall income and the sum of all expenses, covering both direct and indirect costs.