If next year fly fishing became the most popular trend in the US, ceteris paribu
ID: 1126852 • Letter: I
Question
If next year fly fishing became the most popular trend in the US, ceteris paribus, what would happen to the equilibrium wage and employment level in the market for custom fly tying labor?
The equilibrium wage would rise and the equilibrium level of employment would rise
The equilibrium wage would rise and the equilibrium level of employment would fall
The equilibrium wage would fall and the equilibrium level of employment would rise
The equilibrium wage would fall and the equilibrium level of employment would fall
The equilibrium wage would rise and the equilibrium level of employment would rise
The equilibrium wage would rise and the equilibrium level of employment would fall
The equilibrium wage would fall and the equilibrium level of employment would rise
The equilibrium wage would fall and the equilibrium level of employment would fall
Explanation / Answer
If next year fly fishing became the most popular trend in the US then demand for fly fishing gears and other accessories including artificial 'fly' will increase.
This increase in demand for artificial 'fly' will induce the producers of artificial 'fly' to increase production.
As they will increase production, they will hire more labor.
So, demand for custom fly tying labor will increase.
Given the supply of custom fly tying labor, this increase in demand for fly tying labor will lead to rise in both equilibrium wage and equilibrium level of employment of custom fly tying labor.
The correct answer is the option (1).
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