Figure 16P-2 shows the supply and demand for labor in the textile industry. In each of the following scenarios, identify the direction of the shift in either the supply or demand curve and state whether the resulting equilibrium wage and quantity increase or decrease.

a. What are the original equilibrium wage and quantity?

b. Immigration and layoffs from other jobs increase the population of textile workers.

c. A new technology for making self-printed T-shirts reduces the marginal product of labor for textile workers.

Figure 16P-2:

Transcribed Image Text:

Wage ($ thousands) 80 - 70 60 50 40 - 30 20 10 25 50 75 100 Textile workers (thousands)