a. The supply curve is upward sloping. If the wage in this
industry rises, where do the extra workers come from?
b. Suppose there is a significant decrease in demand for fast
food. How is this likely to affect the earnings of fast-food
workers? Show this in the diagram.
c. Now suppose new legislation bans the assignment of
homework to high school students. As a result, more
students look for jobs in the fast-food industry. How will
this affect the labour market for fast-food workers? Show
this in the diagram.
d. What will be the effect on total earnings in the fast-food
industry from the change in part (c)? On what does the
answer depend?
8. The three following diagrams show the supply of luxury ocean
liners at three different levels of aggregation—the entire world, a
particular country, and a particular firm.
sean pound
(Sean Pound)
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