Question

Suppose that the president proposes a new law aimed at reducing healthcare costs: All Americans are required to eat one apple daily. Which of the following statements correctly describes the effect of this apple-a-day law?
A. The value of the marginal product of apple pickers increases.
B. The equilibrium price of apples increases.
C. The demand for apples remains unchanged.
D. The demand for apple pickers remains unchanged.
E. The marginal product of apple pickers increases.
F. The wage of apple pickers increases.

Answer 1

Answer:

A. The value of the marginal product of apple pickers increases

B. The equilibrium price of apples increases.

F. The wage of apple pickers increases.

Explanation:

• In order to keep the healthcare costs low and increase the health care benefits of the people president proposed the apple a day law. Demand for the apples increase as and the equilibrium price of the apples also increases.  

• There are no changes in the marginal producers of the apples. The values of the marginal producers of the apple increases. Demand for the apple pickers also increases along with the daily wages.