Consider the table below, which applies to a domestic labor market, and answer the questions that follow.

a) What is the current equilibrium quantity of labor? what is the current market wage rate?
b) Suppose that two events occur: 1) Opportunities to work abroad induce 4,000 domestic residents to move to foreign labor markets, irrespective of domestic wages : and (ii) Increased demand for the products of domestic firms induces them to offer to hire 2,000 more workers each week at any domestic wage rate?

Transcribed Image Text:

weekly wage rate quantity of labor demanded by firms uantity of labor supplied by workers 500 450 400 350 300 250 200 8,000 12,000 16,000 20,000 24,000 28,000 30,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000