Consider this quote from the article: \"Computers enhance the value of those eng

Question

Consider this quote from the article: "Computers enhance the value of those engaged in 'expert thinking' (thinking outside the box) and 'complex communication' (interpreting information)." For simplicity, let's classify "expert thinkers" and "complex communicators" as high-skilled labor. Suppose the market below shows the market for high-skilled labor. Show what happens in the market for high-skilled labor when improvements in computer technology enhance the productivity of high-skilled labor. Assume that the supply curve for high-skilled workers remains the same in the short term.

Explanation / Answer

Demand curve shifts to the right as the skilled workers are more productive and thus they are more highly desired. Wage rate goes up and number employed increases.

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