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Figure: Equilibrium in the Labor Market
-(Figure: Equilibrium in the Labor Market)Use Figure: Equilibrium in the Labor Market.In the figure,an increase in the productivity of labor,when everything else stays the same,will lead to a(n)_____ in the equilibrium quantity of labor and a(n)_____ in the equilibrium price of labor.
A)decrease;increase
B)increase;decrease
C)decrease;decrease
D)increase;increase

Question

Use the following to answer question:
Figure: Equilibrium in the Labor Market 
-(Figure: Equilibrium in the Labor Market)Use Figure: Equilibrium in the Labor Market.In the figure,an increase in the productivity of labor,when everything else stays the same,will lead to a(n)_____ in the equilibrium quantity of labor and a(n)_____ in the equilibrium price of labor.
A)decrease;increase 
B)increase;decrease 
C)decrease;decrease 
D)increase;increase

Quizplus · Accepted Answer

An increase in productivity of labor will increase the demand for labor. This would shift the demand curve to the right. This would lead to an increase in both the equilibrium quantity of labor and equilibrium price of labor. Therefore, the correct answer is D (increase; increase).

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