5) As the result of a decrease in capital, the demand for labor would _______ ,

Question

5) As the result of a decrease in capital, the demand for labor would _______ , the supply of labor would _______, and the equilibrium quantity of labor hired would _______. (Remember the distinction between a change in demand, i.e., a shift in demand, versus a change in the quantity demanded, i.e., a movement along demand, explained on pp. 63 and 72 in the text. And similarly for supply.)
Answer
a) decrease; decrease; decrease
b) decrease; remain the same; decrease
c) decrease; remain the same; increase
d) decrease; increase; remain the same

Explanation / Answer

b) decrease; remain the same; decrease

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