8 In recent years, some policymakers have proposed requiring firms to improve safety standards. For example, there are laws requiring additional safety training and equipment to be provided to each worker. Let's consider the effects of such a policy on the labour market.

a Suppose that a law required firms to give each worker $3 of safety-related training for every hour that the worker is employed by the firm. How does this law affect the marginal profit that a firm earns from each worker? How does the law affect the demand curve for labour? Draw your answer on a graph with the cash wage on the vertical axis.

b If there is no change in labour supply, how would this law affect employment and wages?

c Why might the labour supply curve shift in response to this law? Would this shift in labour supply raise or lower the impact of the law on wages and employment?

d As Chapter 6 discussed, the wages of some workers, particularly the unskilled and inexperienced, are kept above the equilibrium level by minimum-wage laws. What effect would such an occupational safety policy have for these workers?