Question

The following questions deal with the market! for summer interns. A few years ago a legal case put into question whether internships can be unpaid, effectively raising the minimum pay for an intern to the legislated minimum wage. Answer the following regarding the market for summer interns. [Note, that in the questions below you should not have diagrams for skilled and unskilled workers. Just diagrams of the market for interns.) A. (OFFLINE/PAPER, 10 points) Draw a supply and demand diagram for the market for interns. Over the last several years college graduates have changed their preferences from taking the summer off, to trying to improve their resumes prior to graduating by! getting relevant work experience. Indicate in your diagram what happens to the labor market for interns as preferences change, and college students want to increase the amount of experience internships) they can indicate on their resumes prior to graduation.

Answer 1

Wages & excessive supply of interns DD DD Tary As we can see in the diagram, the demand for interns would go down because of the minimum wage legislation. As the companies will have to pay and can't hive unpaid interns. On the other hand, supply invases as more students want to do internships. As a result, the wages might go down but because of intern's minimum wage legislation it will result in excess supply