In the context of a perfectly competitive model of the labour market, an increase in technology that raises the marginal product of labour at any given level of employment would be expected, in equilibrium, to a) reduce the amount of labour required to produce a given amount of output and hence increase unemployment. b) shift the labour demand curve outwards and lead to an increase in employment and wages. c) have no effect upon labour supply or labour demand curves and hence have no impact on employment or wages. d) reduce the supply of labour to the market and result in an increase in wages but a fall in employment
In the context of a perfectly competitive model of the labour market, an increase in technology that raises the marginal product of labour at any given level of employment would be expected, in equilibrium, to a) reduce the amount of labour required to produce a given amount of output and hence increase unemployment. b) shift the labour demand curve outwards and lead to an increase in employment and wages. c) have no effect upon labour supply or labour demand curves and hence have no impact on employment or wages. d) reduce the supply of labour to the market and result in an increase in wages but a fall in employment
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 13P
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Question
In the context of a
that raises the marginal product of labour at any given level of employment would be expected, in
equilibrium, to
a) reduce the amount of labour required to produce a given amount of output and hence increase
unemployment.
b) shift the labour
c) have no effect upon labour supply or labour demand curves and hence have no impact on
employment or wages.
d) reduce the supply of labour to the market and result in an increase in wages but a fall in
employment
Why the correct answer is B?
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