Answer Happy

In-Class Exercise 14: Resources 1. For each of the following, determine how the event listed will affect both the labor and output markets listed a. The state of Minnesota passes a new minimum wage law for fast food workers, increasing their wages from $10.33 to $15. (Assume the previous equilibrium wage in the market for fast food workers was at $10.33.) Labor Market: Fast Food Workers Output Market: Hamburgers LABOR OUTPUT S D Q
b. An increase in identify fraud causes more people to want ID Theft Protection. Labor Market: Information Technology Output Market: ID Theft Protection Security specialists LABOR OUTPUT s D D Q Q
2. Suppose there are two labor markets in the U.S. economy: skilled labor and unskilled labor. To become a skilled worker, one must spend time and money becoming educated, so there is a smaller supply of skilled labor than unskilled labor. Education also makes skilled workers more productive, so the demand for them is higher than the demand for unskilled workers. a Graph both of these labor markets in their initial equilibria, accounting for the information provided above. bi Suppose that because of advances in technology in output markets, there is an increase in the demand for output produced with skilled labor. How will this affect both markets? (Hint think about the interplay between the two labor markets) Show this on your graphs and explain your answer briefly in the area below the graphs. SKILLED LABOR UNSKILLED LABOR Wage wago Q. Qar
C. How will each of the following four groups be affected by what happens in these markets? Explain briefly. • unskilled workers • skilled workers • consumers of products produced with unskilled labor .consumers of products produced with skilled labor.