Figure 18-10 -\Refer to Figure 18-10. Assume W₁ = $20 and W₂ = $22, and the market is always in equilibrium. A shift of the labor demand curve from D₁ to D₂ would A)increase the value of the marginal product of labor by $2. B)increase the value of the marginal product of labor by less than $2. C)decrease the value of the marginal product of labor by more than $2. D)not change the value of the marginal product of labor.

Question

Quizplus · Accepted Answer

A shift of the labor demand curve from D1 to D2 indicates an increase in demand for labor, which would increase the equilibrium wage from $20 to $22. This increase in wage reflects an increase in the value of the marginal product of labor by $2.

Figure 18-10 -\Refer to Figure 18-10. Assume W1 = $20 and W2

Figure 18-10 -\Refer to Figure 18-10. Assume W₁ = $20 and W₂