1. The link between resource and product markets The following graph represents the labor market in the fast food industry, which consists mainly of high school and college students in a hypothetical economy. Suppose the government decides to impose a labor law that forbids employers from hiring students. Assume that this new legislation has no impact on the desire of students to remain in school. Assuming all other things are constant, show the effect of this legislation on the labor market for the fast food industry by shifting one or both of the curves in the following graph. Labor Market in the Fast Food Industry Supply Demand -o- Supply Demand EMPLOYMENT IN FAST FOOD INDUSTRY The following graph shows the initial demand for and supply of fast food in this economy before the previously identified changes in the labor market. WAGE RATE

1. The link between resource and product markets The following graph represents the labor market in the fast food industry, which consists mainly of high school and college students in a hypothetical economy. Suppose the government decides to impose a labor law that forbids employers from hiring students. Assume that this new legislation has no impact on the desire of students to remain in school. Assuming all other things are constant, show the effect of this legislation on the labor market for the fast food industry by shifting one or both of the curves in the following graph. Labor Market in the Fast Food Industry Supply Demand -o- Supply Demand EMPLOYMENT IN FAST FOOD INDUSTRY The following graph shows the initial demand for and supply of fast food in this economy before the previously identified changes in the labor market. WAGE RATE

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter12: Labor Markets And Labor Unions

Section: Chapter Questions

Problem 1.1P

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Similar questions

Why are the factors that shift the demand for a product different from the factors that shift the demand for labor? Why are the factors that shift the supply of a product different from those that shift the supply of labor?
What is die price commonly called in the labor market?
Name some factors that can cause a shift in the demand curve in labor markets.
Name some factors that can cause- a shift in the supply curve in labor markets.
Table 14.10 shows levels of employment (Labor), the marginal product at each of those levels, and the price at which the film can sell output in the perfectly competitive market where it operates. What is the value of the marginal product at each level of labor? If the firm operates in a perfectly competitive labor market where the going market wage is 12, what is the films profit maximizing level of employment?