5. Suppose that due to a strong caution from the American Dental Association, the demand for caramel apples falls (causing a reduction in caramel apple prices). What will be the effect of this demand change on Value Marginal Product (‘VMP') of Labor, and the quantity of caramel apple workers employed. a. The VMP of labor will shift upward, so the number of apple workers will fall. b. The VMP of labor will shift downward, so the number of apple workers will fall. c. The VMP of labor will shift upward, so the number of apple workers will increase. d. The VMP of labor will shift downward, so the number of apple workers will increase.

5. Suppose that due to a strong caution from the American Dental Association, the demand for caramel apples falls (causing a reduction in caramel apple prices). What will be the effect of this demand change on Value Marginal Product (‘VMP') of Labor, and the quantity of caramel apple workers employed. a. The VMP of labor will shift upward, so the number of apple workers will fall. b. The VMP of labor will shift downward, so the number of apple workers will fall. c. The VMP of labor will shift upward, so the number of apple workers will increase. d. The VMP of labor will shift downward, so the number of apple workers will increase.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q. 1 Analyze and graph the Product Effect and the Substitution Effect in labor demand in the face of an increase in labor price.
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