Consider the following:

Weekly wage rate Quantity of labor Quantity of labor

demanded by firms supplied by workers

$500 8,000 26,000

$450 12,000 24,000

$400 16,000 22,000

$350 20,000 20,000

$300 24,000 18,000

$250 28,000 16,000

$200 30,000 14,000

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a. What is the current equilibrium quantity of labor? What is the current market rate?

Suppose that two events occur:

(i) Opportunities to work abroad induce 4,000 domestic residents to move to foreign labor markets, irrespective of domestic wages, and

(ii) increase demand for the products of domestic firms induce them to offer to hire 2,000 more workers each week at any given wage rate.

b. What is the new equilibrium quantity of labor? What is the new market rate?