1. Price = $10Wage = $20 # of Labor TP Output MPProduct Price MRPMRC 00 17 217 324 427 529 630 727

2. Price = $10  $100Wage = $20 # of Labor TP Output MPProduct Price MRPMRC 00 17 217 324 427 529 630 727 What would change if the DEMAND for the good INCREASED significantly? 1. ________________________________ 2. ________________________________

3. Price = $10Wage = $20 # of Labor TP Output MPProduct Price MRPMRC 00 17  70 217  170 324  240 427  270 529  290 630  300 727  270 What would change if the PRODUCTIVITY of each worker INCREASED? 1. ________________________________ 2. ________________________________

4. Identify the Resource and Shifter (ceteris paribus): 1.Increase in demand for microprocessors leads to a(n) ________ in the demand for processor assemblers. 2.Increase in the price for plastic piping causes the demand for copper piping to _________. 3.Increase in demand for small homes (compared to big homes) leads to a(n) _________ the demand for lumber. 4.For shipping companies, __________ in price of trains leads to decrease in demand for trucks. 5.Decrease in price of sugar leads to a(n) _________ in the demand for aluminum for soda producers. 6.Substantial increase in education and training leads to an _________ in demand for skilled labor. Practice 3 Shifters of Resource Demand

5. What are other reasons for differences in wage?

6. 1.The Union is successful in requiring that new teachers pass a state competency test to be employed. 2.The Labor union advertising to get people to buy union products. 3.The Union educates workers in new methods of production. 4.The union gets tariffs placed on foreign products. 5.The Labor bargains and wins an increase in the wage rate above equilibrium 6.The labor union signs an agreement that employers can only hire union members.

7. Price = $10Wage = $20 # of Labor TP Output MPProduct Price MRPMRC 00 17 217 324 427 529 630 727 Price = $10  Wage = $20 # of Labor TP Output MPProduct Price MRPMRC 00 17 217 324 427 529 630 727 Price = $10Wage = $20 # of Labor TP Output MPProduct Price MRPMRC 00 1 7  70 2 17  170 3 24  240 4 27  270 5 29  290 6 30  300 7 27  270 What would change if the DEMAND for the good INCREASED significantly? 1.________________________ 2.________________________ What would change if the PRODUCTIVITY of each worker INCREASED? 1.________________________ 2.________________________ Unit 5 Resource Market