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Unformatted text preview: 0 to W * . At this time, the supply of labor equals to demand of labor. 4. Because there is a desire in many families to convert from a 2-worker household to one, there is a decrease in supply of labor. As a result, the supply curve shifts leftward. As the graph shown above, the wage rate increases from W 1 to W 2 , and the number of labor decreases from N 1 to N 2 . 5. Because the energy and labor are complementary inputs, a rise in price of crude oil results in a decrease in demand of labor. Therefore, the demand curve shifts leftward. The number of labor decreases from N 1 to N 2 ,and the wage rate decreases from W 1 to W 2....
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This note was uploaded on 06/16/2011 for the course ECON 101 taught by Professor Na during the Fall '09 term at University of North Carolina School of the Arts.
- Fall '09