The paper "Productivity across Industries and Countries" is a great example of an assignment on macro and microeconomic. This shortage of labor will mean that lamb producers will have to reduce their production. This will create a crisis in the lamb production and farmers will start offering higher prices than those of the mining sector so as to attract labor so that they can continue with their production and to cater to their market (Case, & Fair, 1999). The wages of the lamb sector are low and are shown by P1 and the quantity of labor the sector attracts q2 which is under the demand curve D2and supply curve S2.
At D1 the wages of the two sectors are equal at P1 but mining is still attracting a high number of workers. This changes when the mining industry increases its wages to P3 and this increases the number of labor supply to q1 under S2 and D3. Question 1 (b) The margin created by the labor shortage will have a very high impact on the entire lamb production (Frank, 2008). There will be few farmers with lamb and they will sell them at a higher price because the demand will be high and the supply will be low.
The buyers will have no option apart from buying them. These expensive prices by farmers will be moved to the retailers and therefore, the margin will highly impact the retail prices (McConnell, & Brue, 2008). The reason behind this is that those buying from the farmers will have to earn their normal profits. Therefore, they will increase their prices so as to cater for the increased farm prices (Frank, 2008). Question 2 In a perfectly competitive market, the suppliers are price takers and therefore, they have little choice on the price to sell their products.
Therefore, the Australian egg market suppliers have their prices determined by the level of the total supply in the market. This means that by artificially reducing the supply in the market the association aims at the same price for the reduced level of supply. The reason behind this is that there are many buyers and sellers in the industry and therefore, their individual efforts cannot affect the market.
The individual firms are price takers but the industry as a whole is the price maker.
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