Economics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 17

Figure 16P-2 shows the supply and demand for labor in the textile industry. In each of the following scenarios, graph any shift in the supply or demand curve and state whether the resulting equilibrium wage and quantity increase or decrease.
a. What is the original equilibrium?
b. Immigration and layoffs from other jobs increase the population of textile workers, shifting the supply curve to the right by 15,000 workers at any given wage.
c. A new technology for making self-printed T-shirts reduces the marginal product of labor for textile workers, shifting the demand curve to the left by 10,000 workers at any given wage.