Answered: The next two questions are about the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. The next two questions are about the labor market for upholsterers, who are people who do custom upholstery (the fabric on furniture). A new type of pre-sewn fabric piece reduces the amount of work that an upholsterer needs to do on each piece of furniture, increasing how much work each individual upholsterer can do for the same amount of effort. This is describing a change in some part of the labor demand or labor supply curves. Which part? a. Group of answer choices b. Price of the good (P) c. Marginal productivity of labor (MPL) d. The labor/leisure tradeoff in the supply curve e. The minimum wage 2. Assume that the new pre-sewn fabric ends up making the wage of upholsterers go up. You also observe that very few tailors, which is a similarly difficult job, decide to switch from being tailors to being upholsterers in response to the wage increase. What is this most likely an example of? a. Group of answer choices b. Taste-based discrimination c. Compensating differentials d. Specific human capital e. Statistical discrimination f. General human capital

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