Consider the Labor Market for Computer Programmers

question 262

Multiple Choice

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 wage in the labor market for computer programmers?

• A)The equilibrium wage increased.
• B)The equilibrium wage decreased.
• C)The equilibrium wage did not change.
• D)It is not possible to determine what happens to the equilibrium wage.

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Definitions:

Activity Cost Pools

Aggregations of all the costs associated with specific activities, used in activity-based costing to allocate costs more accurately.

Activity-based Costing

A costing method that assigns costs to products or services based on the activities they require, aiming to provide more accurate cost information.

Batch Setup

The process and cost associated with configuring production equipment or facilities to manufacture a batch of a specific item.

Estimated Overhead Cost

The expected indirect costs of production or operations, such as utilities and rent, that do not directly tie to a specific product.