Floods have just ravaged the countryside and cities! You would expect this suppl

Question

Floods have just ravaged the countryside and cities! You would expect this supply shock to shift the marginal product of labour curve up and to the right, raising the quantity of labour demanded at any given real wage. marginal product of labour curve down and to the left, reducing the quantity of labour demanded at any given real wage real wage curve up, reducing the quantity of labour demanded at any given real wage. real wage curve down, raising the quantity of labour demanded at any given real wage.

Explanation / Answer

Correct option is (3).

A flood will cause fatalities, as a result labor supply will decrease. The labor supply curve will shift leftward, which will lead to an increase in real wage rate and decrease in quantity of labor (demanded).

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