Leo runs a bicycle repair shop. He recently exam-ined information on wage and employment levels and noted

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Leo runs a bicycle repair shop. He recently exam-ined information on wage and employment levels and noted that he employs the same number of workers today that he employed in 2009. How-ever, wages (controlling for inflation) increased quite substantially between 2009 and 2013. Assume the supply of labor remained constant over this time period. Give two possible explanations for why Leo’s workers are paid more in 2013.
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Microeconomics

ISBN: 978-1259163531

1st edition

Authors: Dean Karlan, Jonathan Morduch

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