Chapter 6, Problem 2FRQ

a)

To determine

The question requires us to draw a labor supply curve.

Explanation of Solution

The following curve represents the labor supply curve of the AP students:

  

Here, the upward-sloping curve S1 represents the supply curve for cars. It is a positively-sloped curve because there is a direct relationship between the price of a product and its quantity supplied.

b)

To determine

The question requires us to determine the impact of increased wages on the labor supply curve.

Explanation of Solution

The following graph represents the impact of an increased wage for babysitting on the supply curve of AP students:

  

When wage increases for babysitting, AP students move towards the babysitting job from teaching jobs. So, the supply of AP students will fall for a teaching job and will cause the supply curve to shift to the left from S1 to S2 as shown in the above figure.

c)

To determine

The question requires us to determine the impact of an increasing number of economics students on the labor supply curve

Explanation of Solution

The following graph represents the impact of a higher number of AP students on the supply curve:

  

An increase in the number of AP students reflects the higher supply of workers in the labor market. An increase in the supply of AP students will shift the supply curve to the right from S1 to S3 as shown in the above figure.