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AP Microeconomics Practice Quiz: Changes in Factor Demand and Factor Supply

Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026

Test your understanding with short quizzes. This quiz has 9 questions to check your progress.

Question 1 of 9

An increase in the market price of the final product that a firm sells will cause which of the following changes in the labor market for that firm?

All Questions (9)

An increase in the market price of the final product that a firm sells will cause which of the following changes in the labor market for that firm?

A) A rightward shift of the labor demand curve.

B) A leftward shift of the labor demand curve.

C) A rightward shift of the labor supply curve.

D) A movement up along the labor demand curve.

Correct Answer: A

According to the provided content, a change in the output price is a determinant of labor demand. An increase in the price of the output makes each worker's marginal product more valuable, increasing the firm's incentive to hire more workers at any given wage and shifting the labor demand curve to the right.

A government policy that encourages a high level of immigration into a country will most likely have what effect on the country's overall labor supply curve?

A) A movement up along the curve.

B) A movement down along the curve.

C) A leftward shift of the curve.

D) A rightward shift of the curve.

Correct Answer: D

The provided content lists immigration as a determinant of labor supply. An increase in immigration expands the pool of available workers in the country, causing the labor supply curve to shift to the right.

If a new training program significantly enhances the productivity of workers in the manufacturing sector, what is the expected impact on the labor demand curve in that sector?

A) The labor demand curve will shift to the right.

B) The labor demand curve will shift to the left.

C) There will be a movement upward along the labor demand curve.

D) The labor supply curve will shift to the left.

Correct Answer: A

The content states that the productivity of the worker is a key determinant of labor demand. When workers become more productive, each worker generates more revenue for the firm, which increases the firm's demand for labor at any given wage, causing a rightward shift of the labor demand curve.

A societal shift that leads to a stronger preference for leisure time among the working-age population would cause which of the following in the labor market?

A) A rightward shift in the labor demand curve.

B) A leftward shift in the labor supply curve.

C) A rightward shift in the labor supply curve.

D) A leftward shift in the labor demand curve.

Correct Answer: B

The provided content identifies 'preferences for leisure' as a determinant of labor supply. A stronger preference for leisure means that at any given wage, fewer people are willing to work, or they are willing to work fewer hours. This decreases the overall supply of labor, causing the labor supply curve to shift to the left.

A firm develops a new technology that doubles the output of each of its workers. In the market for this firm's labor, this change in a determinant of labor demand will lead to:

A) A decrease in the quantity of labor supplied.

B) A leftward shift of the labor demand curve.

C) A rightward shift of the labor demand curve.

D) A rightward shift of the labor supply curve.

Correct Answer: C

The content specifies that worker productivity is a determinant of labor demand. The new technology increases worker productivity, making each worker more valuable to the firm. This incentivizes the firm to hire more workers at every wage level, causing the labor demand curve to shift to the right.

Which of the following scenarios would most likely cause the labor supply curve for accountants to shift to the left?

A) An increase in the wages paid to accountants.

B) The creation of new, high-paying jobs in the finance industry that are an attractive substitute for accounting.

C) A government subsidy for university accounting programs.

D) An increase in the demand for accounting services.

Correct Answer: B

The 'availability of alternative options' is a determinant of labor supply. If attractive, high-paying alternatives become available, some individuals who might have become or remained accountants will choose those other fields instead. This reduces the number of people willing to supply their labor as accountants at any given wage, shifting the labor supply curve to the left.

A sharp decline in the global market price for cotton would cause a cotton farming firm to respond by altering its demand for farm workers. Which of the following describes this response?

A) Shifting its labor supply curve to the right.

B) Moving down along its existing labor demand curve.

C) Shifting its labor demand curve to the left.

D) Shifting its labor demand curve to the right.

Correct Answer: C

The content states that the output price is a determinant of labor demand. When the price of the final product (cotton) falls, the value of the marginal product of each farm worker decreases. This reduces the firm's incentive to employ workers at any given wage, causing the labor demand curve to shift to the left.

In a country where a large portion of the population begins to reach retirement age and exit the workforce, what is the direct impact on the overall labor market?

A) The labor supply curve shifts to the left.

B) The labor supply curve shifts to the right.

C) The labor demand curve shifts to the left.

D) The labor demand curve shifts to the right.

Correct Answer: A

The 'age distribution' of the population is a determinant of labor supply. As a large segment of the population retires and leaves the workforce, the total number of people available and willing to work at various wage rates decreases. This causes a leftward shift in the labor supply curve.

Which of the following events would cause a shift in the labor demand curve for software engineers, rather than a movement along the curve?

A) A decrease in the wage rate for software engineers.

B) A successful union negotiation that increases the wage rate for software engineers.

C) The development of a new artificial intelligence tool that allows each engineer to write code more efficiently.

D) An increase in the number of graduates with computer science degrees.

Correct Answer: C

A change in the wage rate causes a movement along the labor demand curve. However, the provided content identifies worker productivity as a determinant that shifts the curve. A new AI tool that increases efficiency raises worker productivity, which would cause the labor demand curve to shift. Options A and B describe changes in the wage (price), and option D affects the labor supply curve.