1. Indicate with a graph of supply and demand what is happening in the market for agricultural labor in California.

Significant (and highly elastic) supply causes wages to be pushed downward.

2. What will the new regulation imposed in California do to a farm’s profits? Explain.

In all likelihood, farmer’s profits will fall, as these denote increased costs.

3. Discuss the costs and benefits of having undocumented immigrants working in U.S. agricultural fields.

Answers may vary. Costs include increase in illegal immigration, increased border security costs, etc. Benefits include lower agricultural prices, higher standard of living (relatively) for those workers in the industry.

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