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Suppose a freeze in british columbia destroys part of the apple crop.

a. explain what happens to the price of apples and the marginal product of apple pickers as a result of the freeze. can you say what happens to the demand for apple pickers? why or why not?
b. suppose the price of apples doubles and the marginal product falls by 30 percent. what happens to the equilibrium wage of apple pickers?
c. suppose the price of apples rises by 30 percent and the marginal product falls by 50 percent. what happens to the equilibrium wage of apple pickers?

User Bburrier
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Final answer:

When a freeze destroys part of the apple crop in British Columbia, the price of apples will increase and the marginal product of apple pickers will likely decrease. If the price of apples doubles and the marginal product falls by 30 percent, the equilibrium wage of apple pickers will likely increase. If the price of apples rises by 30 percent and the marginal product falls by 50 percent, the impact on the equilibrium wage of apple pickers is uncertain, but it could potentially decrease.

Step-by-step explanation:

a. When a freeze in British Columbia destroys part of the apple crop, the supply of apples will decrease. As a result, the price of apples will increase because there will be less supply available in the market. The marginal product of apple pickers will likely decrease because there will be fewer apples to pick.

b. If the price of apples doubles and the marginal product of apple pickers falls by 30 percent, it will likely lead to an increase in the equilibrium wage of apple pickers. This is because the higher price of apples indicates higher demand, and the decrease in marginal product indicates that fewer apple pickers are needed to meet that higher demand.

c. If the price of apples rises by 30 percent and the marginal product of apple pickers falls by 50 percent, it is difficult to determine the exact impact on the equilibrium wage of apple pickers without more information. However, the decrease in marginal product suggests that fewer apple pickers will be needed, which could potentially lead to a decrease in their equilibrium wage.

User Julien Guertault
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