Consider the following labor supply and demand diagram: For each of the following situations, explain (and illustrate) what would happen to the market for labor.
(a) The firms who are employing these workers experience a big increase in the demand for their products.
(b) Intel develops a new computer chip that is capable of doing the same work as two employees. Assume that workers and computers are substitutes in Intel's production function.
(c) A newly elected U.S. president issues an executive order, restricting all immigration into the U.S.

Question

Consider the following labor supply and demand diagram:  For each of the following situations, explain (and illustrate) what would happen to the market for labor.
(a) The firms who are employing these workers experience a big increase in the demand for their products.
(b) Intel develops a new computer chip that is capable of doing the same work as two employees. Assume that workers and computers are substitutes in Intel's production function.
(c) A newly elected U.S. president issues an executive order, restricting all immigration into the U.S.

Quizplus · Accepted Answer

The Answer of Consider the following labor supply and demand diagram:  For each of the following situations, explain (and illustrate) what would happen to the market for labor.
(a) The firms who are employing these workers experience a big increase in the demand for their products.
(b) Intel develops a new computer chip that is capable of doing the same work as two employees. Assume that workers and computers are substitutes in Intel's production function.
(c) A newly elected U.S. president issues an executive order, restricting all immigration into the U.S.

Consider the Following Labor Supply and Demand Diagram: for Each