Question

A)In a labor market that is purely competitive (P.C.), one occupation's wage rate is growing while the equilibrium quantity of labor input (Q_L, employees*hours) hired is rising, while in a similar occupation the wage is also growing but the equilibrium Q_L is falling -- what must be happening to the labor demand in these markets?

B)In a recent media story, a professor (not yours!) was quoted saying, "ironically, if the coronavirus continues to spread, companies may try to accelerate the automation of some jobs (Links to an external site.) so they don’t have to depend on workers" -- use labor demand theory to justify (or counter) this statement.

Answer 1

A) In one occupation, both the wage and equilibrium quantity of labor hired is rising which means that there is an increase in demand for labor. In this case, demand curve shifts upward to the right increasing both wage and quantity of labor hired.
In other occupation, wage is rising but the equilibrium quantity of labor hired is falling which occurs when there is a decrease in supply of labor. In this case, supply curve shifts upwards to the left increasing wage but decreasing the equilibrium quantity of labor hired.

(Note: As HOMEWORKLIB's policy, one question is to be answered at a time.)