Use the Graph to Answer the Question About the Labor

Multiple Choice

Use the graph to answer the question about the labor resource market faced by producers of good X. What will shift D ₂ to D ₁?

A) A decrease in the price of a substitute input (if the output effect > substitution effect)
B) An increase in the price of a substitute input (if the substitution effect > output effect)
C) An increase in the price of a substitute input (if the output effect > substitution effect)
D) A decrease in the price of a complementary resource