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November 28, 2014

Homework Help: Microeconomics

Posted by G on Friday, October 24, 2008 at 12:01pm.

I am on the chapter for the factors of production:

Question:

A firm that hires two types of workers—some with computer skills and some without. If technology advances so that computers become more useful to the firm, what happens to the marginal product of the two types? What happens to equilibrium wages?

There would be increase in demand for the quantity of computer works. The demand curve would shift to the right. This would increase the marginal product of labor and wage.

There would be a decrease in the demand for the quantity workers who did not have computer skills. The demand curve would shift to the left. This would decrease the marginal product of labor and wage.

Both equilibriums’would adjust to be equal to the new marginal product.

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