Possible Answers Supply demand Demand supply Check the corre

Aa Aa 5. Perfectly competitive labor markets The following graph depicts the market for doctors. Suppose that a campaign to increase health awareness reduces the number of people requiring hospital treatment. Demonstrate the effect of this change on the market for by shifting the appropriate curve on the following graph. doctors Tool tip: Click and drag one or both of the curves. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just try again and drag it a little farther. WAGE Supply Demand QUANTITY OF LABOR

Solution

First Question:

It will cause the demand curve to shift because here clearly the cause is a demand side factor. A reduction in the number of people requiring healthcare will shift the demand for labor (of doctors) to the left as hospitals will need lesser doctors for the reduced number of patients. SO

the previous change represent a shift of the labor demand curve and movement along the labor supply curve.

Here, \"Fewer doctors are demanded at a given wage\" because here wage has not changed. It is \'other factors\' which has caused a \'shift\' in the demand for labor. Thus wage will remain the same.

Second Question:

Here, the supply of labor will shift because more people are willing to be doctors. This shift will be a rightward shift. SO
the previous change will represent a shift of the labor supply curve and a movement along the labor demand curve. The consition descreibed best is

\" The decrease in equilibrium wage induces more hospitals to hire doctors \"

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