Consider the early 1970s when an oil price shock roiled the U.S. economy, including the labor market. Consider an automotive company that has been negatively impacted by the sudden increase in oil, and the lasting impact it had on automobile demand. (a) How might this shock impact the demand and supply for labor in the automobile company? Illustrate the labor demand and supply curve for the effect of an oil price shocks on automobile demand. Clearly label the curve, including axis. (b) Assume that employees at the automobile company are unionized. Explain how this would change wages and labor demand? Illustrate this effect of unionized work on the labor demand and supply curve, still assuming the oil price shock.

Consider the early 1970s when an oil price shock roiled the U.S. economy, including the labor market. Consider an automotive company that has been negatively impacted by the sudden increase in oil, and the lasting impact it had on automobile demand. (a) How might this shock impact the demand and supply for labor in the automobile company? Illustrate the labor demand and supply curve for the effect of an oil price shocks on automobile demand. Clearly label the curve, including axis. (b) Assume that employees at the automobile company are unionized. Explain how this would change wages and labor demand? Illustrate this effect of unionized work on the labor demand and supply curve, still assuming the oil price shock.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter21: Unemployment

Section: Chapter Questions

Problem 5SCQ: Beginning in the 1970s and continuing for three decades, women entered the U.S. labor force in a big...

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