Yolanda owns a temp agency.She sees demand for her workers increase because firms prefer a more contingent workforce.The value of the marginal product of labor of her temps
A) stays the same.
B) increases because the temps produce more per hour.
C) decreases because the temps know they are going to get jobs.
D) increases because the price of their services is higher.
E) falls because job uncertainty lowers productivity.

Question

Quizplus · Accepted Answer

The value of the marginal product of labor increases when the price of the services provided by labor increases. If there's higher demand for temp workers, firms are willing to pay more for their services, thus increasing the value of their marginal product.

Yolanda Owns a Temp Agency