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1. Use Supply and Demand graphs to illustrate the labor market and also the housing market in a given location. For each problem below provide a brief explanation and illustrate using a graph. a. Firms in this location experience a productivity shock that increases their productivity. How does this impact the labor market in this location? Are equilibrium wages higher or lower than they were before the productivity shock? Will the labor market in the location be hiring more or less workers than before the productivity improvement? b. How will the changes in the labor market impact the demand for housing in your location? Use your graph to illustrate. c. What will happen to price and the quantity of housing units if housing supply is very elastic in your location? Use a housing market graph to illustrate.

1. Use Supply and Demand graphs to illustrate the labor market and also the housing market in a given location. For each problem below provide a brief explanation and illustrate using a graph. a. Firms in this location experience a productivity shock that increases their productivity. How does this impact the labor market in this location? Are equilibrium wages higher or lower than they were before the productivity shock? Will the labor market in the location be hiring more or less workers than before the productivity improvement? b. How will the changes in the labor market impact the demand for housing in your location? Use your graph to illustrate. c. What will happen to price and the quantity of housing units if housing supply is very elastic in your location? Use a housing market graph to illustrate.

Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter18: The Markets For The Factor Of Production
Section: Chapter Questions
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1. Use Supply and Demand graphs to illustrate the labor market and also the housing market in a given location. For each problem below provide a brief explanation and illustrate using a graph. a. Firms in this location experience a productivity shock that increases their productivity. How does this impact the labor market in this location? Are equilibrium wages higher or lower than they were before the productivity shock? Will the labor market in the location be hiring more or less workers than before the productivity improvement? b. How will the changes in the labor market impact the demand for housing in your location? Use your graph to illustrate. c. What will happen to price and the quantity of housing units if housing supply is very elastic in your location? Use a housing market graph to illustrate. d. What will happen to price and quantity of housing units if housing supply is very inelastic? Use a housing market graph to illustrate. e. Very briefly, how might housing policy need to differ in these two locations to accommodate the increase in population caused by the productivity improvement? f. If instead of a productivity increase, your community experiences an increase in amenities. How will that change impact your labor market and your housing market? How are the comparative statics in the labor and housing markets the same or different from the case of a productivity increase? J
Transcribed Image Text:1. Use Supply and Demand graphs to illustrate the labor market and also the housing market in a given location. For each problem below provide a brief explanation and illustrate using a graph. a. Firms in this location experience a productivity shock that increases their productivity. How does this impact the labor market in this location? Are equilibrium wages higher or lower than they were before the productivity shock? Will the labor market in the location be hiring more or less workers than before the productivity improvement? b. How will the changes in the labor market impact the demand for housing in your location? Use your graph to illustrate. c. What will happen to price and the quantity of housing units if housing supply is very elastic in your location? Use a housing market graph to illustrate. d. What will happen to price and quantity of housing units if housing supply is very inelastic? Use a housing market graph to illustrate. e. Very briefly, how might housing policy need to differ in these two locations to accommodate the increase in population caused by the productivity improvement? f. If instead of a productivity increase, your community experiences an increase in amenities. How will that change impact your labor market and your housing market? How are the comparative statics in the labor and housing markets the same or different from the case of a productivity increase? J
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