Consider the labor market for computer programmers,which is in equilibrium.Because of the dot.com boom in the late 1990s,a lot of workers went to school to learn how to write computer code for one of thousands of new dot.com companies.However,when these computer programming students graduated,the dot.com bust took place.The dot.com bust decreased the value of the marginal product of computer programmers.Holding all else equal,what effect did these two circumstances have on the equilibrium wage in the labor market for computer programmers?

Question

Quizplus · Accepted Answer

The increase in the supply of computer programming graduates due to the dot.com boom caused a shift in the supply curve to the right, leading to a lower equilibrium wage. However, the subsequent decrease in the value of the marginal product of computer programmers due to the dot.com bust caused a leftward shift in the demand curve, resulting in a further decrease in the equilibrium wage. Therefore, the equilibrium wage in the labor market for computer programmers decreased.

Consider the Labor Market for Computer Programmers,which Is in Equilibrium