Figure 18-7 -Refer to Figure 18-7. Assume W₁ = $15 and W₂ = $12, and the market is always in equilibrium. A shift of the labor supply curve from S₁ to S₂ would A)increase the value of the marginal product of labor by $3. B)decrease the value of the marginal product of labor by $3. C)decrease the value of the marginal product of labor by more than $3. D)not change the value of the marginal product of labor.

Question

Quizplus · Accepted Answer

A shift of the labor supply curve from S₁ to S₂ would increase the quantity of labor supplied and decrease the wage rate. As a result, the value of the marginal product of labor would decrease by $3, since the additional units of labor would be less productive than the previous ones, and the equilibrium wage rate and quantity of labor would adjust accordingly. Thus, the correct answer is B.

Figure 18-7 -Refer to Figure 18-7. Assume W1 = $15 and W2

Figure 18-7 -Refer to Figure 18-7. Assume W₁ = $15 and W₂