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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,a decrease in the price of the good produced,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)increase;increase
B)decrease;increase
C)increase;decrease
D)decrease;decrease

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,a decrease in the price of the good produced,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)increase;increase 
B)decrease;increase 
C)increase;decrease 
D)decrease;decrease

Quizplus · Accepted Answer

A decrease in the price of the good produced would lead to a decrease in the demand for labor (since the product the labor is producing is now less valuable), which would result in both the equilibrium quantity of labor and the equilibrium price of labor decreasing.

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