1. You must meet requirements for each of the five scenarios below: create a supply and demand graph illustrating the scenario, the shock, and the predicted effects on wages and employment; write a (no more than) 100-word paragraph describing the graph, the scenario, and the predictions.

Scenario #1

Airbnbhas housed over 150 million guests in over 65,000 cities since 2008. Do a bit of research on what Airbnb is and how cities and the hotel industry has been responding to it. Using standard supply and demand graphs from the course, model the labor market for hotel workers, pre-Airbnb, and show how Airbnb has likely affected the market.

Scenario #2

We all love to go to little, local ice cream shops. Many of these places hire teenagers over the summer to serve these delicious treats for us. Suppose that a new minimum wage bill comes online this summer, raising the minimum to $10/hour. Create two graphs: 1) model the market for these ice cream shop workers and how shop owners will likely respond to the minimum wage increase immediately after it happens; 2) model what would happen if a company starts using very cheap robot ice cream servers... how does it affect the market for teenage servers. Explain in your paragraph what is going on and give arguments why your graph is reasonable.

Scenario #3

Research and find specific examples of immigrants working as a) substitutes for U.S. workers and b) compliments to U.S. workers. Make sure you put the correct graph with each story. Use examples different from the ones on this website. Ten bonus points go to anyone who comes up with a real example (with links to source material) that I haven't looked at before.

Scenario #4

Many parts of the U.S. have a shortage of IT workers... not enough people are trained in these fields. Model the market for IT workers. What would happen if a new training program was targeted toward people in Appalachia who have a hard time finding work... the program trains this group to be IT technicians. Does it lead to more employment in IT?

Scenario #5

You are looking at the labor market for young, childless males seeking work with low-paying employers (i.e. Wal-Mart). With a supply and demand graph, show the effects of expanding the EITC to these workers. Illustrate an initial equilibrium (before EITC), the shift due to the new EITC expansion, and point out the wage they get paid from the employer and the additional "pay" they get due to the EITC.