Question

Suppose Congress approves a proposed "temporary worker" program and American firms find

out that they are able to hire workers while paying lower wages. This happens because workers
become "less scarce'. How would this economic shock impact the market for lettuce?

Answer 1

The market for lettuce would be impacted in three ways: labor supply would increase, meaning that lettuce producers can now hire more workers for a lower price.

This cheaper labor would likely increase supply, because more producers would try to enter the market to take advantage of the cheap workers.

Finally, the lower labor costs, and the higer supply, would reduce the price of lettuce, meaning that consumers will be able to buy more lettuce for less money.