D. Assume that demand for jewelry falls. What do you expect will happen to wages and employment in the beaded bag industry? Wages in the beaded bag industry will: Increase Decrease Remain the same It depends Employment in the beaded bag industry will: Increase Decrease Remain the same It depends Add the beaded bag industry_graph to your graph sheet and illustrate the outcomes in both markets. Jewelry Industry Beaded Bag Industry W W LS $25 LD # workers # workers Explain your reasoning for part D (above) using economic concepts:

D. Assume that demand for jewelry falls. What do you expect will happen to wages and employment in the beaded bag industry? Wages in the beaded bag industry will: Increase Decrease Remain the same It depends Employment in the beaded bag industry will: Increase Decrease Remain the same It depends Add the beaded bag industry_graph to your graph sheet and illustrate the outcomes in both markets. Jewelry Industry Beaded Bag Industry W W LS $25 LD # workers # workers Explain your reasoning for part D (above) using economic concepts:

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 9PA

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Praxilla, who lived in ancient Greece, derives utility from reading poems and from eating cucumbers. Praxilla gets 30 units of marginal utility from her first poem 27 units of marginal utility from her second poem 24 units of marginal utility from her third poem, and so on, with marginal utility declining by three units for each additional poem. Praxilla gets six units of marginal utility for each of her next three cucumbers consumed, five units of marginal utility for each of her next three cucumbers consumed, four units of marginal utility for each of the following three cucumbers consumed, and so on, with marginal utility declining by one for every three cucumber consumed. A poem costs three bronze coins hut a cucumber costs only one bronze coin. Praxilla has 18 bronze coins. Sketch Praxillas budget set between poems and cucumbers, placing poems on the vertical axis and cucumbers on the horizontal axis. Start off with the choice of zero poems and 18 cucumbers, and calculate the changes in marginal utility of moving along the budget line to the next choice of one poem and 15 cucumbers. Using this step-by-step process based on marginal utility, create a table and identify Praxillas utilityâ€”maximizing choice. Compare the marginal utility of the two goods and the relative prices at the optimal choice to see if the expected relationship holds. Hint: Label the table columns: 1) Choice, 2} Marginal Gain from More Poems, 3) Marginal Loss from Fewer Cucumbers, 4) Overall Gain or Loss, 5) Is the previous choice Optimal? Label the table rows: 1) 0 Poems and 18 Cucumbers, 2) 1 Poem and 15 cucumbers, 3) 2 Poems and 12 cucumbers, 4) 3 Poems and 9 Cucumbers, 5) 4 Poems and 6 cucumbers 6) 5 Poems and 3 Cucumbers, 7) 6 Poems and 0 Cucumbers.