Consider the Labor Market for Computer Programmers,which Is in Equilibrium

question 257

Multiple Choice

Consider the labor market for computer programmers,which is in equilibrium.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:

Debt To Assets Ratio

Measures the percentage of assets provided by creditors; computed by dividing total liabilities by total assets.

Total Assets

The combined value of everything a company owns, including cash, property, equipment, and inventory.

Total Debt

The sum of all liabilities, both current and long-term, that a company owes to creditors.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects receivables or the credit it extends to customers.