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Question: Many college students attempt to land internships before graduation to burnish their resumes, gain experience in a chosen field, or try out possible careers. The hope shared by all of these prospective interns is that they will find internships that pay more than typical summer jobs, such as waiting tables or flipping burgers.
a. With wage measured on the vertical axis and number of hours of work on the horizontal axis, draw a supply and demand diagram for the market for interns in which the minimum wage is non-binding at the market equilibrium.
b. Assume that a market downturn reduces the demand for interns by employers. However, many students are willing and eager to work in unpaid internships. As a result, the new market equilibrium wage is equal to zero. Draw another supply and demand diagram to illustrate this new market equilibrium.
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