Question by MachoMachoMan B: Economics –Supply and Demand for Labour?
Can someone help me with this question? Explain if this statement is True or False:

“As more people buy Internet service, the price of Internet service will fall. The fall in the price of Internet service will lead to a fall in the wage rate paid to Web page designers.”

Best answer:

Answer by Hubris252
False. The increased demand for internet services means more demand for web page designers because more stores open online outlets to tap new markets. As the number of people using the internet increases, so does the wage paid to people who design the pages they look at.

Jon, your explanation points out why the answer is false but you close with “answer true.” Why?

Know better? Leave your own answer in the comments!

2 thoughts on “Economics –Supply and Demand for Labour?”

  1. Are you able to elaborate upon your answer? The question is rather poorly written, as there are several effects going on here. The answer would be true, except for the fact that increased internet usage would mean increased demand for more web pages. Demand for more web pages would lead to a relative scarcity of designers, and thus an increase of their wages. Moreover, web page designers are not paid for using the fees charged by internet service providers. They are paid by individual companies that want to be available online.

    So answer true, but note your objection in the margin.

  2. Hubris is right considering just the factors the question gives. More internet users=>greater demand for internet sites=>greater demand for web page designers=>higher wage for web page designers. Until a bunch of college students realize the opportunity to make a bunch of money, then the supply of designers increases and the wage should decrease, or at least the marginal increase in the wage will decrease.

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