The following graph shows the labour market in a province in Eastern Canada. The legislature in this province passes strong right-to-work laws that make it very difficult for unions to organize workers, so the wage is always equal to the market-clearing value. Except for this difference in legislation, the two provinces are very similar. The initial position of the graph corresponds to the initial labour market condition in the eastern province before the labour union negotiated the new, higher wage for workers in the western province. Adjust the graph to show what happens to employment and wages in the eastern province after some workers in the western province lose their jobs and decide to move to the eastern province. WAGE Labour Market in Eastern Canada LABOUR Supply Demand Demand Supply (?)
The following graph shows the labour market in a province in Eastern Canada. The legislature in this province passes strong right-to-work laws that make it very difficult for unions to organize workers, so the wage is always equal to the market-clearing value. Except for this difference in legislation, the two provinces are very similar. The initial position of the graph corresponds to the initial labour market condition in the eastern province before the labour union negotiated the new, higher wage for workers in the western province. Adjust the graph to show what happens to employment and wages in the eastern province after some workers in the western province lose their jobs and decide to move to the eastern province. WAGE Labour Market in Eastern Canada LABOUR Supply Demand Demand Supply (?)
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
Problem 15P
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Transcribed Image Text:The following graph shows the labour market in a province in Eastern Canada. The legislature in this province passes strong right-to-work laws that
make it very difficult for unions to organize workers, so the wage is always equal to the market-clearing value. Except for this difference in legislation,
the two provinces are very similar.
The initial position of the graph corresponds to the initial labour market condition in the eastern province before the labour union negotiated the new,
higher wage for workers in the western province.
Adjust the graph to show what happens to employment and wages in the eastern province after some workers in the western province lose their jobs
and decide to move to the eastern province.
WAGE
Labour Market in Eastern Canada
LABOUR
Supply
Demand
Demand
Supply
(?)
Transcribed Image Text:The following graph shows the labour market in a province in Western Canada. Initially, the market-clearing wage is $10 per hour. Suppose that the
legislature in this western province passes laws that make it easy for workers to join a union. Through collective bargaining, the union negotiates a
wage of $16 per hour.
Use the black point (plus symbol) to show how many union workers will be employed at the $16 wage. (Hint: Be sure to place the point on the
appropriate curve.)
WAGE (Dollars per hour)
20
18
16
14
12
10
2
0
0
2
Labour Market in Western Canada
4
Supply
8
Demand
6
10
12
14
LABOUR (Millions of workers)
16
18 20
+
Union Negotiations
(?)
The following graph shows the labour market in a province in Eastern Canada. The legislature in this province passes strong right-to-work laws that
make it very difficult for unions to organize workers, so the wage is always equal to the market-clearing value. Except for this difference in legislation,
the two provinces are very similar.
The initial position of the graph corresponds to the initial labour market condition in the eastern province before the labour union negotiated the new,
higher wage for workers in the western province.
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