which of the following will increase the demand for labour

Analyze the question: We are asked which factor will increase the demand for labour. Labour demand is a derived demand, which means firms hire workers because of the demand for the goods and services those workers produce.

Concept: Demand for labour depends on:

• The demand for the final product (derived demand). If consumers want more of the product, firms hire more workers.
• The marginal productivity of labour. Higher productivity means higher demand.
• The wage rate. A change in the wage causes a movement along the demand curve (a change in quantity demanded), not a shift of the curve.
• Prices of other factors, such as capital, and technology.

Evaluating the options:

• A. Increase wage rate: A higher wage reduces the quantity of labour firms want to hire. This is the opposite of what the question asks.
• B. Labour's demand for output: This is clearly worded poorly. It is meant to be "demand for labour's output", the demand for the product that labour produces. As derived demand, a rise in demand for the product raises the demand for labour. This is the best fit.
• C. Low wage rate: A low wage increases the quantity of labour demanded, which is a movement along the curve. It does not increase the demand itself, though it is a tempting option.
• D. Low marginal productivity: Lower productivity makes labour less valuable to employers, so demand falls.

Answer: Option B is the only one that points to a rise in demand for labour, because labour demand is derived from demand for the output labour produces.

Tip: Remember "derived demand": no demand for the product means no demand for the workers. Also, in Economics, separate change in quantity demanded (price/wage changes, movement along the curve) from change in demand (other factors, shift of the curve). WASSCE tests this often.