Draw a graph of the aggregate labor market in equilibrium. Then consider each of the following scenarios. In each case, show the effect on the market and explain what will happen to the real wage and the equilibrium quantity of labor.

a. A technological change occurs that increases the productivity of all workers.

b. The government increases income tax rates.

c. Worker preferences change so that they prefer consumption of market goods to consumption of leisure.

d. The government reduces payroll taxes firms pay when they hire workers.