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.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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