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Problem #5: Cross-price elasticity Consider teenage labor and adult labor as separate inputs in production for fast-food restau- rants. Suppose the wage of teenage workers increases (but the adult wage remains the same). Analyze the effect of the teenage wag labor, given that: e increase on fast-food restaurants employment of adult 1.Teenage labor costs are a large share of total costs at fast-food restaurants. 2.Adults dislike the tasks teenagers do at fast-food restaurants (i.e. cleaning bathrooms), so it takes big increases in their wages to get them to do this kind of work. Given these 2 facts, are teenage workers and adult workers more likely to be gross substitutes or gross complements in fas-food production, holding all other factors constant? Explain your answer.
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