Suppose That the Labor Market for Life Guards Is Initially

question 29

Multiple Choice

Suppose that the labor market for life guards is initially in equilibrium. Whistles are an important safety tool that life guards use as a part of their jobs. A fire destroys the largest factory that produces whistles. In the market for life guards the equilibrium wage

• A)increases because the marginal productivity of life guards increases.
• B)decreases because the marginal productivity of life guards decreases.
• C)increases because the supply of life guards increases.
• D)decreases because the supply of life guards decreases.