L6 HW : Labour Market Problems

Dear Lower Sixth

Attempt at least TWO of these problems by tomorrow.  Thank you

Easy

1)Draw a pair of diagrams to show what happens in the markets for BK Whoppers and Burger King “chefs” when the price of Big Macs decreases. Write an exam-style 3 mark explanation

2)Draw a pair of diagrams to show what happens in the markets for cars and car salespersons when the government gives a subsidy to car manufacturers. Write an exam-style 3 mark explanation

Medium

3)If Hollister were to increase its order to a Bangladeshi textile factory in the short term, explain whether the demand for labour is likely to be elastic or inelastic.  Give more than one reason.

Hard

4)Tube Drivers are represented very well by their trade union.  If London Underground wanted to increase the number of tube journeys, it would have to offer a considerable increase in the wage rate it offers its tube drivers.  Using a supply and demand diagram of this labour market and the concept of elasticity, show why this is the case.