How does an increase in labor-productivity increase income? a. An increase in productivity, increases the marginal product of labor which increases the demand for labor. As demand for labor increases, the wage rate increases. b. An increase in productivity, decreases the marginal product of labor which increases the demand for labor. As demand for labor increases, the wage rate increases. c. An increase in productivity, increases the marginal product of labor which decreases the demand for labor. As demand for labor decreases, the wage rate increases. d. An increase in productivity, increases the marginal product of labor which decreases the demand for labor. As demand for labor decreases, the wage rate decreases.
How does an increase in labor-productivity increase income? a. An increase in productivity, increases the marginal product of labor which increases the demand for labor. As demand for labor increases, the wage rate increases. b. An increase in productivity, decreases the marginal product of labor which increases the demand for labor. As demand for labor increases, the wage rate increases. c. An increase in productivity, increases the marginal product of labor which decreases the demand for labor. As demand for labor decreases, the wage rate increases. d. An increase in productivity, increases the marginal product of labor which decreases the demand for labor. As demand for labor decreases, the wage rate decreases.
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter18: The Markets For The Factor Of Production
Section: Chapter Questions
Problem 2QCMC
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How does an increase in labor-productivity increase income?
a. An increase in productivity, increases the marginal product of labor which increases the demand for labor. As demand for labor increases, the wage rate increases.
b. An increase in productivity, decreases the marginal product of labor which increases the demand for labor. As demand for labor increases, the wage rate increases.
c. An increase in productivity, increases the marginal product of labor which decreases the demand for labor. As demand for labor decreases, the wage rate increases.
d. An increase in productivity, increases the marginal product of labor which decreases the demand for labor. As demand for labor decreases, the wage rate decreases.
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