Question

In the labor market, what causes a movement along the supply curve? What causes a shift in the supply curve?

Short answer

Changes in the wage rate causes a movement along the supply curve.

Step-by-step solution

Step 1

The supply of labor in particular markets could be affected by changes in any of the variables such as—changes in preferences, incomes, prices of related goods and services, population, and expectations. In addition to these variables that affect the supply of labor in general, there are changes that could affect supply in specific labor markets.

Step 2

Change in the wage rate(the price of labor) causes a movement along the supply curve.

A change in anything else that affects supply of labor causes a shift in supply curve.