Consider the labor market for computer programmers. During the late 1990s, the value of the marginal product of all computer programmers increased dramatically. Holding all else equal, what effect did this process have on the labor market for computer programmers? The equilibrium wage
A)increased, and the equilibrium quantity of labor increased.
B)increased, and the equilibrium quantity of labor decreased.
C)decreased, and the equilibrium quantity of labor increased.
D)decreased, and the equilibrium quantity of labor decreased.

Question

Quizplus · Accepted Answer

When the value of the marginal product of labor increases, it means that each worker is producing more value for the employer. This typically leads to an increase in demand for labor, which, holding all else equal, results in higher wages and an increase in the quantity of labor employed.

Consider the Labor Market for Computer Programmers