Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 9DQ
To determine
Identify the suitable explanation for the given situation.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The demand for skilled workers in the United States has been increasing. To increase the supply of skilled workers, many argue that immigration reform to allow more skilled labor into the United States is needed. Explain whether you agree or disagree.
You are an economic consultant advising on the market for low-skilled labour. The market has an excess supply of individuals at the market rate. The government wants to increase employment in the labour market. Analyse these three different policies using supply and demand analysis. 1) Get rid of unemployment benefits. 2) Reduce tax paid by firms who employ low-skilled labour. 3) Allow firms to employ at any wage by removing wage protections.
Suppose the number of workers who are allowed to legally immigrate into the country to perform seasonal work has been cut in half. Wages in the affected industries are likely to............ due to a shift of the labor .................curve.
a. increase: demand
b. decrease : supply
c. increase : supply
d. decrease: demand
Chapter 4 Solutions
Economics: Principles & Policy
Knowledge Booster
Similar questions
- Consider an INCREASE in the wage (as demanded by the labor groups) to a higher level than the equilibrium price for labor. SHOW geometrically what will happen in the labor market. What problem(s) is/are likely to arise in the labor market?arrow_forwardThe current quantity demanded of hairdressers is 47,00047,000, and the average salary in the labor market is $27,000$27,000 per year. Recently, several salons closed due to competition, which led to employers demanding only 36,00036,000 hairdressers.Assuming that when quantity demanded decreases by 1,1001,100 workers, the average salary will decrease by $500$500, calculate the new salary in the labor market. Write the exact answer. Do not round.arrow_forwardDraw supply and demand curves for the labor market. What is the equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*)? If the current market wage is $10.50, how does the labor market adjust back to the equilibrium? If a minimum wage of $8.50 an hour is mandated, what is the quantity of labor demanded? what is the quantity of labor supplied? What is the amount of shortage or surplus in the labor market as a result of the price control? If a minimum wage of $9.50 an hour is mandated, what is the quantity of labor demanded? what is the quantity of labor supplied? What is the amount of shortage or surplus in the labor market as a result of the price control? Using the supply and demand graph in part (a) above, illustrate the effect of the price control.arrow_forward
- Complete the following. Note that several factors are listed in the book. For each factor, be sure to tell how it will shift the curve. Name some factors that can cause a shift in the demand curve in markets for goods and services. Name some factors that can cause a shift in the supply curve in markets for goods and services.arrow_forwardSuppose that Congress passes a law which requires employers to provide employees some healthcare benefits that raises the cost to the employers by $5 per hour. a) What is the impact on the demand for labor? (Think quantitatively) b) If the employees value the benefit exactly equal to the cost, what will be the impact on the supply of labor? c) How will the law affect the wage and level of employment? Are the employers better off or worse off? Are the employees better off or worse off? d) Suppose before the implementation of the law, the wage in the market was $3 above the minimum wage. In this case, how the law will affect the wage and level of employment?arrow_forwardThe rent for 2-bedroom apartments in Las Vegas rose from an average of $954 in June 2017 to $1,038 in June 2018. Demand for 2-bedroom apartments in Las Vegas was rising during this period as well. This is hard to explain because the law of demand says that higher prices should lead to lower demand. Do you agree or disagree? Explain your answer.arrow_forward
- Can you answer the question 9, please? No explanation needed. Thanks in advance. 9) Which one of the following correctly describes how price adjustments eliminate a shortage? A) As the price falls, the quantity demanded will increase while the quantity supplied will decrease. B) As the price rises, the quantity demanded will decrease while the quantity supplied will increase. C) As the price falls, the quantity demanded will decrease while the quantity supplied will increase. D) As the price rises, the quantity demanded will increase while the quantity supplied will decrease.arrow_forwardCommodities include raw materials, minerals and foodstuffs. In the 1970s the price of one commodity, oil, increased fourfold when oil producers cut sales to the West (USA and Europe). Fears of oil shortages also resulted in a huge increase in the price of sugar during the mid to late 1970s. On the other hand, during the 1990s there was a significant fall in a wide range of commodity prices compared to their mid-1990s level as shown in the table below. Prices in 1999 Compared to the Mid 1990s (%) Coffee - 54 Cotton - 51 Wheat - 41 Sugar - 51 Rubber - 65 Aluminum - 39 Copper - 52 Nickel - 60 Lead - 41 The decline in commodity prices hurt developing countries the worst. In sub-Saharan Africa for instance, commodity export account for three quarters of total export earnings. Commodity prices have always been volatile. Food production, for instance, is typically affected by weather conditions and disease and demand is influenced by changes in tastes and, occasionally, medical…arrow_forwardOn April 1, 2009, in the middle of a recession, the government of the province of Ontario, Canada increased the provincial minimum wage from $8.75 to $9.50. What will the likely effect of this policy be?arrow_forward
- Over the years, the demand for textiles in Country A has grown in spite of rising prices. How would you reconcile this fact with the law of demand?arrow_forwardUse the graph to answer the question that follows. Price/$ s1 p2 p1 0 q1 q2 Quantity Which of the following is responsible for the change in demand and supply of silk shirts from X1 to X2? Increase in the popularity of silk shirts and introduction of new government subsidies for the cotton industry Decrease in consumers' income and improvement in weaving machinery Increase in the popularity of satin shirts and introduction of new government subsidies for the sericulture (silk) industry Increase in the popularity of silk shirts and introduction of new government subsidies for the sericulture (silk) industry Increase in consumers' income and the popularity of satin shirts x1 s2 x2 d1 d2arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Macroeconomics: Principles and Policy (MindTap Co...EconomicsISBN:9781305280601Author:William J. Baumol, Alan S. BlinderPublisher:Cengage Learning
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Macroeconomics: Principles and Policy (MindTap Co...
Economics
ISBN:9781305280601
Author:William J. Baumol, Alan S. Blinder
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning