Change in Factor of Production Example: There is a decrease in the price of oil, and you make plastic containers. Effect on Labor Market The decrease in the price of oil will make it cheaper to produce plastic containers. The firm can lower its price and it will sell more. This will increase the demand for labor at your firm. 1. Apple develops the iPhone and demand for it surges as people realize the benefits of this improved technology. You manufacture flip phones. 2. You own a sports equipment manufacturing firm. You were just informed rent at your warehouse space would double. 3. You develop a popular video game and continue to develop new versions to keep people interested in the game. 4. The coronavirus pandemic forces people to shelter in place. You are an airplane mechanic looking for work in Louisville where UPS is headquartered. 5. There is an increase in the price of steel. You make tractors.
Change in Factor of Production Example: There is a decrease in the price of oil, and you make plastic containers. Effect on Labor Market The decrease in the price of oil will make it cheaper to produce plastic containers. The firm can lower its price and it will sell more. This will increase the demand for labor at your firm. 1. Apple develops the iPhone and demand for it surges as people realize the benefits of this improved technology. You manufacture flip phones. 2. You own a sports equipment manufacturing firm. You were just informed rent at your warehouse space would double. 3. You develop a popular video game and continue to develop new versions to keep people interested in the game. 4. The coronavirus pandemic forces people to shelter in place. You are an airplane mechanic looking for work in Louisville where UPS is headquartered. 5. There is an increase in the price of steel. You make tractors.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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You are given a scenario where this a change in a factor of production or a change in demand for an item. You need to explain in sentence form how this would change the demand for labor. See the example and model your answers after how the example is written.
Transcribed Image Text:### Changes in Factors of Production and Their Effects on the Labor Market
This table provides examples of how changes in various factors of production impact the labor market across different industries.
| Change in Factor of Production | Effect on Labor Market |
|--------------------------------|------------------------|
| **Example:** There is a decrease in the price of oil, and you make plastic containers. | The decrease in the price of oil will make it cheaper to produce plastic containers. The firm can lower its price and it will sell more. This will increase the demand for labor at your firm. |
| 1. Apple develops the iPhone and demand for it surges as people realize the benefits of this improved technology. You manufacture flip phones. | |
| 2. You own a sports equipment manufacturing firm. You were just informed rent at your warehouse space would double. | |
| 3. You develop a popular video game and continue to develop new versions to keep people interested in the game. | |
| 4. The coronavirus pandemic forces people to shelter in place. You are an airplane mechanic looking for work in Louisville where UPS is headquartered. | |
| 5. There is an increase in the price of steel. You make tractors. | |
#### Explanation of Graphs or Diagrams
- **No graphs or diagrams present in this table**.
#### Detailed Examination of Each Scenario
1. **Impact of Competitive Technology**:
- **Scenario**: Apple develops the iPhone and its demand surges.
- **Effect**: As more customers prefer the iPhone over traditional flip phones, the demand for flip phones manufactured by your company would decline. Consequently, there could be a reduction in the labor force required to produce flip phones due to decreased sales.
2. **Increase in Rent for Warehouse Space**:
- **Scenario**: Rent for your sports equipment manufacturing firm's warehouse space doubles.
- **Effect**: The increased cost of rent may strain financial resources. This could lead to cost-cutting measures, potentially including layoffs or reduced hiring to manage increased operational expenses.
3. **Ongoing Development of a Popular Video Game**:
- **Scenario**: Continuous development of new versions of a popular video game.
- **Effect**: Sustained or increased demand for the video game could lead to the expansion of the development team, increasing the demand for skilled labor in programming, design, and other areas related to game development.
4. **Pandemic's Impact on
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