Answer to Question #192716 in Economics for Zukile

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].