1. Some economists studying the effects of the minimum wage law have found that it tends to reduce the employment of black teenagers relative to white teenagers. Briefly explain the economics behind this finding.

2.Some craft unions, such as electricians, restrict the number of workers who can join the union and then negotiate with employers to hire only union workers. Use a demand and supply graph to illustrate the effect of a craft union on employment and wages in an industry.

3.Traditionally, unions have been strongest in manufacturing industries. In the United States,

unionism reached its peak in 1945, and it has been falling since then.

a. How does the changing sectoral composition of the U.S. economy help to explain this trend?

b. Two industries in which, traditionally, unions have been very strong are automobile manufacturing and airlines. Why has union power weakened in these industries?