Draw a market demand curve and market supply curve for automobiles and label these curvesD1andS1,respectively.

On the same graph, show what would happen if the auto workers union required all manufacturers of automobiles to now provide health insurance for ALL workers and their dependents. (Note: Assume that prior to this change, manufacturers of automobiles do NOT provide health insurance coverage to 100 percent of their employees and/or their dependents.)

Think about whether you think this change would affect the demand curve or the supply curve for automobiles, and then consider in which direction you think the curve should shift. Draw a new curve and use a subscript 2 to identify it as the new demand (D2) or supply (S2), whichever is appropriate.

Be sure to label:

Both axes

The original equilibrium price and quantity before the change

The new equilibrium price and quantity after the change