Decrease the use of post mail in order to save trees

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Reference no: EM13986786

What if governments decide to decrease the use of post mail in order to save trees, so what will happened to the people worked for post office. Demand of postman will decrease. Supply will not changed. A left-ward shift would decrease wage and employment.

PART 1: Now, you need to think how these outcomes can be explained by the discussed labor demand theories (In this case, nothing has happened to labor supply. So, you don’t need to refer to labor supply theories). Justify the use of one of the labor economics models in explaining the change.

PART 2: Let’s try to answer this question given the described hypothetical condition, which resulted in a leftward shift in demand for labor but caused no shift in supply of labor. First, note that a shift in labor demand has to happen because of a change in anything but wage (note that a change in wage is shown by a movement along the labor demand curve, not by a shift in it). Then, focus either on long-term or short-term demand for labor. If you focus on short-term, then you need to use the marginal productivity theory. But, if you want to focus on long-term, then you need to use the neoclassical production theory. In both cases, candidates that carry the effect are P (price of output) and technology. After figuring this out and explaining it in words, the next step is to present a graphical analysis. Use the relevant graphical illustration of your selected model.

Reference no: EM13986786

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