Jonathon, Runs a Hybrid-Car Factory Which Uses Both Machines (Capital)

question 122

Multiple Choice

Jonathon, runs a hybrid-car factory which uses both machines (capital) and workers (labour) in production.Capital can be substituted for labour and vice-versa, that is, a given job in the factory can either be performed by a machine or a worker.Which of the following situations is likely to lead to a change in Jonathon's demand for labour (that is, a shift in the labour demand curve) ?
(i) a recession leads to many new workers looking for employment
(ii) the government announces new, extremely restrictive fuel efficiency standards for cars
(iii) the price of machines used in Jonathon's factory decreases

• A)(i) and (ii) only
• B)(i) and (iii) only
• C)(ii) and (iii)
• D)(i), (ii) and (iii)

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