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Unformatted text preview: That is, the change in technology will likely lead to a decrease in the marginal product of unskilled labor. Use graphs to present this information. U n s k i l l e d L a b o r M a r k e t F i r m A (3 points) Capital-intensive technologies usually require skilled rather than unskilled labor to work with the new capital. Also the production of capital tends to employ skilled rather than unskilled labor. Thus an indirect impact of minimum wage legislation is to increase the marginal revenue product (MRP) of skilled labor in the long run, as firms shift to more capital-intensive technologies. Use graphs to present what is happening in the Skilled Labor Market. S k i l l e d L a b o r M a r k e t F i r m A...
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This note was uploaded on 11/27/2011 for the course ECONOMICS 101 taught by Professor Kelly during the Fall '10 term at Wisconsin.
- Fall '10