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Region Y produces goods and services that are exported to other regions. In the 1990s, there was a large decrease in personal crime rates
Region Y produces goods and services that are exported to other regions. In the 1990s, there was a large decrease in personal crime rates in the region compared to elsewhere, due to exogenous factors. Notes: Personal crimes are those that victimize people (not businesses). The number of criminals is negligible relative to the entire population. a) Use demand-supply diagrams to show the long run effects of this decrease in crime on the exported output (Q) market and the labor (L) market in region Y. Show the shift(s) in demand and/or supply curve(s) and use arrows to indicate the interactions between markets. Label the axes and curves in your graphs appropriately. b) Explain in words HOW and WHY each market's long-run demand and/or supply curve(s) were affected by this change in crime activity. It is not acceptable to simply write "there was a change in demand" (you must discuss what caused such change).
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