3. How changes in the goods market affect the demand for labor In this question,

Question

3. How changes in the goods market affect the demand for labor

In this question, you'll explore the effect of a bad crop in Washington State on the price of raspberries in the United States, as well as on the daily wages of raspberry pickers in Oregon. Assume that raspberry buyers don't care whether their raspberries come from Washington State or Oregon.

On the following graph, show the effect the bad crop in Washington State has on the market for raspberries in the United States by shifting either the demand curve, the supply curve, or both.

Fill In The Blanks Based on the graph for the market for raspberries in the United States, the bad crop has caused the price of raspberries in the United States to ........(Fall /Rise)

Fill In Blanks As a result of the change in the price of raspberries, the wage level for raspberry pickers in Oregon. .............(Drecreases / Increases)

Explanation / Answer

As a result of bad crop, the supply of raspberries will decrease. This will shift the supply curve to the left. Keeping demand constant, this will result in an increase in price and a decrease in quantity sold in the market.

With an increase in prices, the wages for raspberry pickers will increase. This is because demand for raspberry pickers will increase.

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