A new government study reveals that daily consumption of peanut butter increases life expectancy by 10 years. What will this do to the input markets for peanuts and peanut butter factory workers? Assuming bologna is a substitute for peanut butter, what will happen in the market for bologna factory workers?

The demand for peanut butter will increase, and this will cause the demand for peanut butter inputs to increase as well. We would expect a rise in the price of peanuts and an increase in the wages of peanut butter factory workers. The quantity supplied of both should also increase. If fewer people now buy bologna, its demand will drop, as will the demand for bologna factory workers. Their wages should decline as well.