The Following Table Includes Information on the Labor Market for Bakers

question 17

Essay

The following table includes information on the labor market for bakers. $\begin{array}{ccc}\text { Wage }&\text { Labor Demand }&\text { Labor Supply }\\\$ 10 & 50 & 10 \\\$ 15 & 45 & 20 \\\$ 20 & 40 & 40 \\\$ 25 & 35 & 70 \\\$ 30 & 30 & 110 \\\$ 35 & 25 & 160\end{array}$
a. What is the equilibrium wage and quantity of bakers in this market?
b. With the invention of instant teleportation, baker positions can be outsourced to countries with cheaper labor without sacrificing freshly baked goods. This reduces the labor demand for bakers by four-fifths. What is the new equilibrium wage and quantity of bakers hired?
c. Who wins in this situation in the short run? Who loses? What needs to happen in the long run so that the economic losers can benefit from outsourcing?

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Definitions:

Protests

Public demonstrations of objection, disapproval, or dissent towards policies, actions, or situations.

Policy Officials

Individuals holding positions within government or organizations who are responsible for creating, implementing, or advising on public policy.

Legislators

Elected officials whose primary responsibility is to make laws within a legislative body.

Political Advantage

The benefit or upper hand gained in a political context, often used to further one’s influence or objectives.