(Solved): Consider a tropical island economy with only two sectors: souvenir manufacturing and hospitality (h ...

Consider a tropical island economy with only two sectors: souvenir manufacturing and hospitality (hoteis), Both sectors are perfectly competitlye, and workers are equally able and willing to work in either industry. Only foreign tourists demand souvenirs and hotel stays, so changes in the domestic labor market do not affect the product demand curve in either sectoc. Suppose a union forms in the souvenir manufacturing industry. The union limits its membership to less than the number of workers employed before the union formed-and forces all employers in the industry to hire only union workers. Show the effect of unionization in the souvenir industry on the labor market for souvenir manufacturers. Now show the effect of unionization in the souvenir industry on the labor market for hospitality workers. (?) Summarize your findings in the following table.