Sort the items into four groups: those that change the production function, those that change the demand for labor, those that change the supply of labor, and those that do not change the production function, the demand for labor, or the supply of labor. Say in which direction each change occurs.

Use the following list of events that occur one at a time to work Problem.

• The Middle East cuts supplies of oil to the United States.
• The New York Yankees win the World Series.
• U.S. labor unions negotiate wage hikes that affect all workers.
• A huge scientific breakthrough doubles the output that an additional hour of U.S. labor can produce.
• Migration to the United States increases the working-age population.