Question Three (40 points)

How would each of the following likely affect the real wage and employment of unskilled workers on an automobile plant assembly line? (select the right answer, then explain and justify your answer).

1.Demand for the type of car made by the plant increases.

a.Real wage and employment decrease

b.Real wage and employment increase

c.Real wage increase and employment decrease

d.Real wage decrease and employment increase

2.A sharp increase in the price of gasoline causes many commuters to switch to public transportation.

a.Real wage and employment decrease

b.Real wage and employment increase

c.Real wage increase and employment decrease

d.Real wage decrease and employment increase

3.Because of alternative opportunities, people become less willing to do factory work.

a.Real wage and employment decrease

b.Real wage and employment increase

c.Real wage increase and employment decrease

d.Real wage decrease and employment increase

4.The plant management introduces new assembly-line methods that increase the number of cars unskilled workers can produce per hour while reducing defects.

a.Real wage and employment decrease

b.Real wage and employment increase

c.Real wage increase and employment decrease

d.Real wage decrease and employment increase

5.Robots are introduced to do most basic assembly-line tasks.

a.Real wage and employment decrease

b.Real wage and employment increase

c.Real wage increase and employment decrease

d.Real wage decrease and employment increase