An increase in the value of the marginal product of labor has the effect of increasing the
A)demand for labor.
B)wage.
C)quantity of labor employed.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

An increase in the value of the marginal product of labor means that each additional unit of labor is producing more output. This makes labor more productive and valuable to the firm, which in turn leads to an increase in the demand for labor. With an increase in demand, employers are willing to pay a higher wage to attract and retain workers, and this increase in wage makes it more attractive for individuals to work, leading to an increase in the quantity of labor employed. Therefore, all of the above choices are correct.

An Increase in the Value of the Marginal Product of Labor