Economists have estimated that for every 5 new export jobs created in Victoria, 3 new local employment jobs are created. The city currently has 300,000 workers, of which 70% work in the local good and service producing market. However, a new export firm, ViaTech, has just opened in Victoria and will hire 15,000 export workers.

a. What is the employment multiplier for Victoria? (2 mark)

b. Based on the simple employment multiplier, what is the indirect impact? (1 mark)

c. Based on the simple employment multiplier, how many total workers will work in the export producing sector? (1.5 marks)

d. Based on the simple employment multiplier, what is the change in total employment as a result? (1.5 marks)

e. Unfortunately, the simple employment multiplier is flawed. On average, what do you expect the final equilibrium quantity of labour to be in Victoria after the new firm enters and why? (3 marks)