Consider the Labor Market for Computer Programmers

question 63

Multiple Choice

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.

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Definitions:

Price Rise

An increase in the general level of prices for goods or services over a period of time.

Elasticity Coefficient

A measure of how much the quantity demanded or supplied of a good changes in response to a change in price.

Price Range

The spectrum of prices at which a particular good or service is sold, varying from the lowest to the highest amounts customers are asked to pay.

Inelastic Demand

A situation where the demand for a product does not significantly change in response to changes in its price.