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

question 220

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 quantity in the labor market for computer programmers?

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

Understand the key characteristics and outcomes of monopolistic competition.

Determine the conditions for long-run equilibrium in monopolistic competition and how price equates to average total cost.

Analyze the impact of an increase in demand within monopolistically competitive markets and predict market dynamics.

Interpret graphical representations of firms and markets in monopolistic competition concerning prices, outputs, economic profits, and losses.

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Definitions:

Manufacturing Costs

The total expenses involved in making a product, including direct materials, direct labor, and factory overhead.

Absorption Costing

An accounting method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a product.

Misleading

Presenting information in a way that creates a false impression or misconstrues facts, often to deceive.

Overproduction

Overproduction occurs when more goods are produced than are demanded by the market, often leading to excess inventory and wastage of resources.