5. Suppose that due to a strong caution from the American Dental Association, the demand for caramel apples falls (causing a reduction in caramel apple prices). What will be the effect of this demand change on Value Marginal Product (‘VMP') of Labor, and the quantity of caramel apple workers employed. a. The VMP of labor will shift upward, so the number of apple workers will fall. b. The VMP of labor will shift downward, so the number of apple workers will fall. c. The VMP of labor will shift upward, so the number of apple workers will increase. d. The VMP of labor will shift downward, so the number of apple workers will increase.
5. Suppose that due to a strong caution from the American Dental Association, the demand for caramel apples falls (causing a reduction in caramel apple prices). What will be the effect of this demand change on Value Marginal Product (‘VMP') of Labor, and the quantity of caramel apple workers employed. a. The VMP of labor will shift upward, so the number of apple workers will fall. b. The VMP of labor will shift downward, so the number of apple workers will fall. c. The VMP of labor will shift upward, so the number of apple workers will increase. d. The VMP of labor will shift downward, so the number of apple workers will increase.
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter18: The Markets For The Factor Of Production
Section: Chapter Questions
Problem 1PA
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