Economics 1st Edition by Dean Karlan,Jonathan Morduch

Exercise 22

Suppose that fast-food chains start using healthier ingredients, increasing the demand for fast food and therefore for food-service workers, as shown in Figure 16P-3.
a. What are the new equilibrium wage and quantity of labor in the fast-food industry?
b. Assume that the skills required of a sales clerk at a retail store are similar to those required of workers at a fast-food restaurant. If workers are completely indifferent between fast-food jobs and retail-sales jobs, what will be the wages for sales clerks?