Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 28 - Part IX - Unemployment - Problems and Applications - Page 606: 7

Answer

a) The wages would likely increase (possibly between 10 percent and 20 percent), and the number of workers would likely decrease.

Work Step by Step

b) The supply of labor would increase from the changes in the manufacturing labor market. The equilibrium wage would decrease, and more workers would be employed by the service labor market.
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