Consider the labor market for computer programmers. Because of the dot.com boom in the late 1990s, a lot of workers went to school to learn how to write computer code for one of thousands of new dot.com companies. However, when these computer programming students graduated the dot.com bust took place. The dot.com bust decreased the value of the marginal product of computer programmers. Holding all else equal what effect did these two circumstances have on the equilibrium quantity in the labor market for computer programmers?
A)The equilibrium quantity of labor increased.
B)The equilibrium quantity of labor decreased.
C)The equilibrium quantity of labor did not change.
D)It is not possible to determine what happens to the equilibrium quantity of labor.

Question

Quizplus · Accepted Answer

The increase in supply due to more workers entering the field and the decrease in demand due to the dot.com bust have opposing effects, making it indeterminate what happens to the equilibrium quantity of labor without additional information.

Consider the Labor Market for Computer Programmers