Question

1.21. One factor affecting the market demand for labour is market wage. What will happen to the market demand for labour if there is an increase in market wage?

[1] A shift in demand curve to the right showing an increase in demand.

[2] A simultaneous increase in wages and demand.

[3] An upward movement along the demand curve.

[4] Leftward shift in demand curve.

[5] A downward movement along the demand curve. 

Answer 1

An increase in market wage will not shift the demand curve, but there will be an upward movement along the demand curve.

So, the correct answer is [3].