Suppose that the tourism department’s prediction of increased tourism activities and investment has been proved right. Use appropriate diagrams to answer [Hint: Let’s assume the labor market in tourism industry is perfectly competitive]: (a) What should be the new wage level in the tourism industry? (b) If due to huge union pressure, the government sets minimum wage above this equilibrium wage, what should be the consequence? What would happen to social welfare?
Economics Case Study
August 9th, 2017 admin