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Case Study: Workers in a certain occupation will soon require a government issued licence to legally practice in that occupation. To get the new licence workers will need to study and pass an exam and then pay for a licence. Employers who provide this service will need to close their shop unless they employ these licensed employees to serve the public. Based on this information:
Questions:
a) Briefly discuss how in the near term this new development will change the Supply of labour in this occupation.
b) Briefly discuss how in the near term this new development will change the Demand for labour in this occupation.
c) Briefly discuss how this development with affect the equilibrium wage rate and the number of workers employed in the occupation.
The fear of unwanted price wars may explain why many firms are reluctant and suppose that a new machine tool having a useful life of only one year costs $80,000. Exam: 050474RR - MACROECONOMIC MODELS AND FISCAL POLICY
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