Consider the market for labour. Using a supply and demand diagram, show the impacts of the...

Consider the market for labour. Using a supply and demand diagram, show the impacts of the following events on the market’s equilibrium wage and labour quantity.

(a) An increase in immigration. (10%)
(b) An infectious disease kills 30% of the workforce.
(c) Workers gain skills that make them more productive

Solutions

Expert Solution

In each graph, wage rate (P) and quantity of labor (Q) are depicted vertically and horizontally, respectively. D0 and S0 are initial labor demand and supply curves intersecting at point A with equilibrium wage rate P0 and quantity of labor Q0.

(a)

An increase in immigration will increase labor supply, shifting labor supply curve rightward, decreasing wage rate and increasing employment.

In following graph, S0 shifts right to S1, intersecting D0 at point B with lower wage rate P1 and higher employment Q1.

(b)

Loss of workforce decreases labor supply, shifting labor supply curve leftward, increasing wage rate and decreasing employment.

In following graph, S0 shifts left to S1, intersecting D0 at point B with higher wage rate P1 and lower employment Q1.

(c)

An increase in labor productivity increases the demand for labor, shifting labor demand curve rightward, increasing both wage rate and employment.

In following graph, D0 shifts right to D1, intersecting S0 at point B with higher wage rate P1 and higher employment Q1.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Consider the market for labour. Using a supply and demand diagram, show theimpacts of the following...

Consider the market for labour. Using a supply and demand diagram, show theimpacts of the following events on the market’s equilibrium wage and labour quantity. (a) An increase in immigration. (b) An infectious disease kills 30% of the workforce. (c) Workers gain skills that make them more productive.

Consider a tax on the producers in a market. By using supply and demand curves, show...

Consider a tax on the producers in a market. By using supply and demand curves, show the consumer surplus, producer surplus, the equilibrium price and quantity traded before tax. Now show the consumer surplus, producer surplus, equilibrium price and quantity traded after tax. Finally make sure to show the revenue of the tax and the deadweight loss associated with the tax. Now do the same exercise in part-c by assuming a tax on consumers. What happens to consumer surplus, producer...

Consider the following demand and supply equations in the market for labour. Supply: W = 10...

Consider the following demand and supply equations in the market for labour. Supply: W = 10 + (1/3) L Demand: W = 1,000 − (2/3) L Show your work as you respond to the following questions. What is the market equilibrium wage and quantity? (5%) The government implements a minimum wage of W = 370. What is the Consumer Surplus? (5%) Calculate the Producer Surplus under a minimum wage of W = 370. (5%) Find the Deadweight Loss under a...

Consider the following demand and supply equations in the market for labour. Supply: W = 10...

Consider the following demand and supply equations in the market for labour. Supply: W = 10 + (1/3)L Demand: W = 1, 000 − (2/3)L Show your work as you respond to the following questions. (a) What is the market equilibrium wage and quantity? (b) The government implements a minimum wage of W = 370. What is the Consumer Surplus? (c) Calculate the Producer Surplus under a minimum wage of W = 370. (d) Find the Deadweight Loss under a...

Consider the following supply and demand equations in the market for labour. Supply: w=L Demand: w=...

Consider the following supply and demand equations in the market for labour. Supply: w=L Demand: w= 500−L. Use these equations to respond to the following questions. (a) What is the market equilibrium price and quantity? (b) Under a free market, what is the Total Surplus? (c) Suppose that the government enacts a minimum wage of w= 400. What is theTotal Surplus? (d) What is the Surplus amount of labour under the minimum wage?

Demand and supply. Show in a diagram the effect on the demand curve, the supply curve,...

Demand and supply. Show in a diagram the effect on the demand curve, the supply curve, the equilibrium price and quantity of each of the following pairs of events. a. The market for hand-sanitizers in New York at the beginning of April 2020. i. The number of Covid-19 cases increases exponentially starting from 1st March 2020; ii. On March 9, 2020 New York State Governor Andrew Cuomo allowed for state production of hand-sanitizers. b. The market for touristic services in...

Consider the market for renewable energy in Australia. In a demand and supply diagram, illustrate the...

Consider the market for renewable energy in Australia. In a demand and supply diagram, illustrate the impact of each of the following economic events on the equilibrium price and quantity( show initial equilibrium as A and final as B). Identify the condition(s) of demand and supply and briefly explain the process of moving from the initial to final equilibrium. QUESTION: 1. The Andrew's government completed 3 new solar and wind farms. 2.The Federal government increase subsidies and incentives to renewable...

Using Aggregate Demand and Supply analysis supported by a diagram, show the effect on an economy...

Using Aggregate Demand and Supply analysis supported by a diagram, show the effect on an economy of a fall in investment and explain how and in what ways government action as recommended by the OECD might stop economies falling into a recession. Word Limit: 200 words

Draw a supply and demand diagram for the market for food. (a) If the Supply curve...

Draw a supply and demand diagram for the market for food. (a) If the Supply curve is perfectly elastic, what happens to price and quantity when demand shifts? (b) If the Demand curve is perfectly inelastic, what happens to price and quantity when supply shifts?

Using supply and demand diagrams, show the effect of the following events on the market for...

Using supply and demand diagrams, show the effect of the following events on the market for sweatshirts. A hurricane in South Carolina damages the cotton crop. The price of leather jackets falls. All colleges require morning exercise in appropriate attire. New knitting machines are invented. Each original post should include four diagrams with an explanation for each. Respond and engage with at least two of your classmates. NOTE: diagrams can be created using a MS Office product, or drawn by...

Subjects