Economics: The Basics 1st Edition by Mike Mandel

Exercise 7

Imagine a job that is extremely unpleasant because of strong odors in the work area.
a) Suppose you had a choice between taking that job or taking another job at the same pay without the smell. Which one would you choose?
b) Using your answer from (a), is the labor supply curve for the first (smelly) job to the left or the right of the second (nonsmelly) job?
c) In equilibrium, will the wage for the first (smelly) job be higher or lower than that for the second (nonsmelly) job? Illustrate your answer using a supply-demand diagram.