e for making tacos. you can click the Reset to Initial Values button to return the elements in the calculator to their original positi ges to the calculator, it's just here to help you answer the following questions. sange the values in the boxes with the white background by clicking in the box and typing. The graph and any gly. 1 30 40 50 60 70 80 90 100 OF LABOR (Thousands of workers) Graph Input Tool LABOR MARKET CALCULATOR Wage rate Labor demanded (Thousands of workers) Price of a taco (Dollars) is $3, the equilibrium wage in the fast-food labor market is S 14 30 Labor supplied (Thousands of workers) per hour. ? 70 d for tacos increases enough so that the price of a taco rises to $6. Ordinarily, this would result in a new equilibrium age in the labor market for young people who work in fast-food restaurants. mim they can only afford to pay the initial equilibrium wage. In this labor market, if the price of tacos increases, but resta librium wage that prevailed before the increase in demand for tacos, there will be a labor of arkers.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Consider the labor market for the fast-food industry, which consists mainly of high school and college students. Assume that all fast-food restaurants
are profit maximizing. The following calculator shows the market demand curve (blue curve) and market supply curve (orange curve) for student
workers, who are responsible for making tacos.
At any time in this problem, you can click the Reset to Initial Values button to return the elements in the calculator to their original positions. You will
not be graded on any changes to the calculator; it's just here to help you answer the following questions.
Tool tip: You can directly change the values in the boxes with the white background by clicking in the box and typing. The graph and any related
values will change accordingly.
WAGE RATE
IX
0 10 20 30 40 50 60 70 80 90 100
QUANTITY OF LABOR (Thousands of workers)
14
Graph Input Tool
LABOR MARKET CALCULATOR
Wage rate
Labor demanded
(Thousands of
workers)
Price of a taco
(Dollars)
When the price of a taco is $3, the equilibrium wage in the fast-food labor market is $
14
30
3
Labor supplied
(Thousands of
workers)
per hour.
(?)
70
Suppose that the demand for tacos increases enough so that the price of a taco rises to $6. Ordinarily, this would result in a new equilibrium
employment level and wage in the labor market for young people who work in fast-food restaurants.
However, restaurants claim they can only afford to pay the initial equilibrium wage. In this labor market, if the price of tacos increases, but restaurants
continue to pay the equilibrium wage that prevailed before the increase in demand for tacos, there will be a labor
workers.
Transcribed Image Text:Consider the labor market for the fast-food industry, which consists mainly of high school and college students. Assume that all fast-food restaurants are profit maximizing. The following calculator shows the market demand curve (blue curve) and market supply curve (orange curve) for student workers, who are responsible for making tacos. At any time in this problem, you can click the Reset to Initial Values button to return the elements in the calculator to their original positions. You will not be graded on any changes to the calculator; it's just here to help you answer the following questions. Tool tip: You can directly change the values in the boxes with the white background by clicking in the box and typing. The graph and any related values will change accordingly. WAGE RATE IX 0 10 20 30 40 50 60 70 80 90 100 QUANTITY OF LABOR (Thousands of workers) 14 Graph Input Tool LABOR MARKET CALCULATOR Wage rate Labor demanded (Thousands of workers) Price of a taco (Dollars) When the price of a taco is $3, the equilibrium wage in the fast-food labor market is $ 14 30 3 Labor supplied (Thousands of workers) per hour. (?) 70 Suppose that the demand for tacos increases enough so that the price of a taco rises to $6. Ordinarily, this would result in a new equilibrium employment level and wage in the labor market for young people who work in fast-food restaurants. However, restaurants claim they can only afford to pay the initial equilibrium wage. In this labor market, if the price of tacos increases, but restaurants continue to pay the equilibrium wage that prevailed before the increase in demand for tacos, there will be a labor workers.
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