Assume a labour market for fruit picking, where the wage rate is determined by the demand and supply of labour. Describe what will happen to the wage and the quantity of labour employed in the labour market with the following government policies based on union pressure. a) A restriction on the number of backpackers allowed in Australia. b) A legally required increase in the minimum wage of 10%. c) The imposition of minimum requirement for locally produced fruits to be used by Australian jam producers. d) The imposition of a sales tax on fruits imported from overseas.

a) If the government restricts the number of backpackers allowed in Australia, the supply of labor for fruit picking will decrease. This is because backpackers are a significant source of labor in the fruit picking industry. With a decrease in the supply of labor, the wage rate will increase as employers compete for the remaining workers. As a result, the quantity of labor employed in the labor market will decrease as employers will not be able to afford to hire as many workers at the higher wage rate.

b) If the government imposes a legally required increase in the minimum wage of 10%, the wage rate in the labor market for fruit picking will increase. This is because employers will have to pay their workers more per hour. With an increase in the wage rate, the quantity of labor supplied will increase as more workers will be willing to work at the higher wage rate. However, the quantity of labor demanded will decrease as employers will not be able to afford to hire as many workers at the higher wage rate. This may lead to unemployment in the industry.

c) If the government imposes a minimum requirement for locally produced fruits to be used by Australian jam producers, the demand for labor in the fruit picking industry will increase. This is because the demand for locally produced fruits will increase, leading to an increase in the quantity of labor demanded. With an increase in the demand for labor, the wage rate will increase as employers compete for the available workers. As a result, the quantity of labor employed in the labor market will increase as more workers will be willing to work at the higher wage rate.

d) If the government imposes a sales tax on fruits imported from overseas, the demand for locally produced fruits will increase. This is because the price of imported fruits will increase, making locally produced fruits relatively cheaper. With an increase in the demand for locally produced fruits, the demand for labor in the fruit picking industry will increase. With an increase in the demand for labor, the wage rate will increase as employers compete for the available workers. As a result, the quantity of labor employed in the labor market will increase as more workers will be willing to work at the higher wage rate.