The diagram below shows the market for fast-food workers in British Columbia.
a. The supply curve is upward sloping. If the wage in this industry rises, where do the extra workers come from?
b. Suppose there is a significant decrease in demand for fast food. How is this likely to affect the earnings of fast-food workers? Show this in the diagram.
c. Now suppose new legislation bans the assignment of homework to high school students. As a result, more students look for jobs in the fast-food industry. How will this affect the labour market for fast-food workers? Show this in the diagram.
d. What will be the effect on total earnings in the fast-food industry from the change in part (c)? On what does the answer depend?