Question at position 7 If the wage rate of workers producing a good decreases, then which of the following will most likely occur? 4MA15The quantity supplied of the good will decrease.The supply of the good will increase.Demand for the good will increaseQuantity demanded for the good will decrease. The demand curve will shift to the right.

Question

Question at position 7 If the wage rate of workers producing a good decreases, then which of the following will most likely occur? 4MA15The quantity supplied of the good will decrease.The supply of the good will increase.Demand for the good will increaseQuantity demanded for the good will decrease. The demand curve will shift to the right.

BlackTom AI · Accepted Answer

A decrease in workers' wages lowers firms' marginal and average costs, which makes supplying the good more profitable at every price; this causes the supply curve to shift to the right (an increase in supply).

1. Relevant knowledge points and concepts
- Supply vs. quantity supplied: "quantity supplied" is a movement along the supply curve in response to price changes; "supply" (an increase or decrease) means the entire supply curve shifts due to non-price factors.  
- Non-price determinants of supply include input costs (wages), technology, taxes/subsidies, and number of sellers. A fall in input costs increases supply.

2. Step-by-step reasoning process
- Wages are an input cost. If wages fall, the cost of producing each unit falls.  
- Lower production costs mean producers will supply more units at the same market price (or accept a lower price for the same quantity).  
- That change is represented graphically as a rightward shift of the supply curve: for any given price, the quantity supplied increases.

3. Intermediate calculation example
- Suppose initial supply equation P = 10 + 2Q (price P, quantity Q). For P = 14, Q = (14 − 10)/2 = 2.  
- If wage decline reduces fixed/variable costs so the equation becomes P = 8 + 2Q, then for the same P = 14, Q = (14 − 8)/2 = 3.  
- This numerical example shows quantity supplied at the same price rises from 2 to 3 — a rightward shift of the supply curve (increase in supply).

4. Why the correct answer is correct
- The wage decrease is a non-price supply determinant that reduces costs; hence supply increases (shift right), matching the chosen option.

5. Why other options are incorrect
- "The quantity supplied of the good will decrease." — wrong direction; quantity supplied would increase at each price.  
- "Demand for the good will increase" and "The demand curve will shift to the right." — wage changes affect producers' costs, not buyers' willingness to buy, so demand is unchanged.  
- "Quantity demanded for the good will decrease." — quantity demanded moves with price or demand shifts; a wage cut for workers (producers' wages) does not directly reduce quantity demanded.

6. Conclusion
Therefore, the correct outcome is that the supply of the good will increase, which matches the provided answer.

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