Question

Consider the labor market for computer programmers. Because of the dot 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 companies. However, when these computer programming students graduated, the dot bust took place. The dot 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?

Answer 1

Answer: the equilibrium wage decreased

Step-by-step explanation:

At the beginning when there was the dot boom the demand for computer programmers went up and the supply was already given so the equilibrium wage rose because more companies wanted programmers and the quantity of programmers was fixed for the period (you need time to have a new programmer) but after that, the dot bust took place, the demand for computer programmmers diminished since the value of the marginal of computer programmers decreased so the equilibrium wage decreased.