Question

Consider the labor market for artisanal bakers in the United States. What would happen to labor demand or labor supply if the following situations occurred?

1. Fast-food restaurants and restaurant chains start promoting artisanal foods in order to draw a more sophisticated clientele, and the ad campaign works.
2. Happy that their talents are being recognized, artisanal bakers increase their rate of production.
3. Social norms used to make it difficult for women to be artisanal bakers, but these norms have decreased over time.
4. Tighter immigration laws prevent European bakers from entering the United States to take advantage of higher wages and benefits.
5. Droughts have reduced the supply of wheat, which lowers the available amount of flour.

Answer 1

a. Since their work is being promoted, labor demand will increase and the labor demand curve will shift rightwards.

Li Amou

b. As their rate of production or efficiency is increasing, the demand for labor will decrease because (1) labors will demand more wages as their productivity increases and the demand will contract because of the inverse relationship between wages and labor demand and (2) the firm will require fewer employees as productivity of each employee increases.

c. Now that norms that women cannot be artisanal bakers have decreased, labor supply will increase and hence their wages will decrease.

JANA - + लहालले

d. Now that new European laborers cannot enter the American market, labor supply will be limited to America only, If the demand is higher than the supply of American labors then wages will increase leading to a decrease in the hiring capacity of firms(Restaurants and food chains). But for the sake of simplicity let's say that supply decreases because in a way supply will decrease

Voss Employement

e. As the draught will increase the price of wheat, given there is no government intervention. There will be less demand for artisanal food which will reduce the demand for artisanal labor.