Higher gas prices have led to an increase in demand for compact cars that get better gas mileage and a decrease in demand for larger cars that get poor gas mileage. Using graphs, show, and verbally explain, how this change in demand in the market for cars affects the labor market for workers (labor supply and labor demand) in the car manufacturing industry. Make sure that you explain exactly why each curve shifts.

Higher gas prices have led to an increase in demand for compact cars that get better gas mileage and a decrease in demand for larger cars that get poor gas mileage. Using graphs, show, and verbally explain, how this change in demand in the market for cars affects the labor market for workers (labor supply and labor demand) in the car manufacturing industry. Make sure that you explain exactly why each curve shifts.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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14. The figure shows the supply and demand for labor in the textile industry. In each of the following scenarios, identify the direction of the shift in either the supply or demand curve and state whether the resulting equilibrium wage and quantity increase or decrease. What are the original equilibrium wage and quantity? Immigration and layoffs from other jobs increase the population of textile workers. A new technology for making self-printed T-shirts reduces the marginal product of labor for textile workers.
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Suppose you run a business that specializes in producing graphic T-shirts, using labor as an input. Hourly wage ($) 24 22 8 Wage ($) 26 24- 22- Based on the table above, graph the labor supply and labor demand curves and identify the market equilibrium wage and quantity using the graph below. 20- Instructions: Use the line tools provided (Supply and Demand) to plot the labor supply and labor demand lines for wages of $8 and $24 (2 points per line). Use the point tool provided (E) to indicate market equilibrium wage and quantity. 18- 16- 14- 12- 10- A- 2 0 Quantity demanded 0 0 50 100 150 200 250 300 100 350 400 200 300 Quantity supplied 600 550 500 450 400 350 300 400 Hours worked reset 250 200 500 600 Supply Demand E
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