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New technology farming equipment is developed. These new machines are substitutes for farm laborers, but they are complements for high-income workers such as farm engineers and farm supervisors. This new technology will shift the demand curve for low-income workers to the ______ while shifting the demand curve for high-income workers to the _____. a. Left, left b. Right, left c. Left, right d. Right, right

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New technology farming equipment is developed. These new machines are substitutes for farm laborers, but they are complements for high-income workers such as farm engineers and farm supervisors. This new technology will shift the demand curve for low-income workers to the ______ while shifting the demand curve for high-income workers to the _____.

  1. Left, left
  2. Right, left
  3. Left, right

d.      Right, right

✅ Answers (1)

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Private answer
  • Left, right

Explanation:

If a firm can purchase the new technology instead of employing more low-income workers, the demand for low-income workers will decrease, which will be indicated by a shift in the demand curve to the left. On the other hand, when the new technology acts as a complement for high-income workers, the demand for high income workers will increase which is indicated by a shift to the right because hiring high-income workers requires less low-income workers because of the technology, and hence saving labor cost.

 

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Answered on June 25, 2020 9:21 pm

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