2. Assume that the (daily) demand (measured in hours of work) of unskilled labor in a particular town is given by D(w) = 100-5w, where w denotes the hourly wage rate. The supply of unskilled labor at the same location is given by S(w) = 10w-50. Explain what would be the effect (if any) of a $12 per hour minimum wage mandate in this market.

2. Assume that the (daily) demand (measured in hours of work) of unskilled labor in a particular town is given by D(w) = 100-5w, where w denotes the hourly wage rate. The supply of unskilled labor at the same location is given by S(w) = 10w-50. Explain what would be the effect (if any) of a $12 per hour minimum wage mandate in this market.

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter12: Labor Markets And Labor Unions

Section: Chapter Questions

Problem 1.1P

See similar textbooks

Similar questions

At the current starting salary of $18,000 per year, the number of new business school graduates demanded is 100,000 a year and the number supplied is 120,000. Based on this information, you can conclude that Select one: O a. there's a shortage of new business school graduates in the market. O b. the equilibrium wage of business school graduates is more than $18,000 per year. the equilibrium wage of business school graduates is less than $18,000 per year. O d. the labor market for new business school graduates is in equilibrium.
A firm faces a perfectly elastic demand for its output at a price of $6 per unit of output. The firm, however, faces an upward-sloped labor supply curve ofE = 20w - 120where E is the number of workers hired each hour and w is the hourly wage rate. Thus, the firm faces an upward-sloped marginal cost of labor curve ofMCE = 6 + 0.1EEach hour of labor produces five units of output. How many workers should the firm hire each hour to maximize profits? What wage will the firm pay? What are the firm’s hourly profits?
When a competitive firm hired nine workers, its profits were $70. When it hired 10 workers, its output was went from 9 to 11 units. Each unit of output sold for $20 while the wage of each worker was $12. What is the firm's new profit level? > Question 11 In a conventional modeling of the minimum wage, the minimum wage has a greater impact on employment when demand is elastic rather than inelastic. False O True
11. Calculating the price elasticity of supply Deborah is a stay-at-home parent who lives in Miami and provides math tutoring for extra cash. At a wage of $50 per hour, she is willing to tutor 7 hours per week. At $65 per hour, she is willing to tutor 10 hours per week. , which means Using the midpoint method, the elasticity of Deborah's labor supply between the wages of $50 and $65 per hour is approximately that Deborah's supply of labor over this wage range is
1. Assume the quantity of envelopes licked per hour by Sticky Gums, Inc., is where L is the number of laborers hired per hour by the firm. Assume further that the envelope licking business is perfectly competitive with a market price of 1 cent per envelope. A. How much labor would be hired at a competitive wage of $10? What about $5? $2? Use these results to sketch a demand curve for labor. B. Assume that Sticky Gums hires its labor at an hourly wage of $10 what quantity of envelopes will be licked when the price of a licked envelope is 2 cents? What about 5 cents? 10 cents? Use your results to sketch a supply curve for licked envelopes.
11. Calculating the price elasticity of supply Dina is a stay-at-home parent who lives in Denver and does some consulting work for extra cash. At a wage of $25 per hour, she is willing to work 6 hours per week. At $35 per hour, she is willing to work 16 hours per week. Using the midpoint method, the elasticity of Dina's labor supply between the wages of $25 and $35 per hour is approximately that Dina's supply of labor over this wage range is which means
9. Calculating the price elasticity of supply Dmitri is a university student who lives in Vancouver and teaches tennis lessons for extra cash. At a wage of $50 per hour, he is willing to teach 7 hours per week. At $65 per hour, he is willing to teach 10 hours per week. Using the midpoint method, the elasticity of Dmitri's labour supply between the wages of $50 and $65 per hour is approximately , which means that Dmitri's supply of labour within this wage range is
The demand and supply of labour are estimated by W = 28 - 0.001LD and W = 16 + 0.0005LS, where W is the hourly wage rate and L is labour. If the government gives a payroll subsidy of $3 per hour to the employer, the new wage rate employers pay would be: O A. $21 O B. $18 O C. $17 D. $23
Assume a woman’s non-labor income elasticity is -0.2 and own wage elasticity is 0.4 and she originally works 30 hours per week. b. What is the effect of a wage increase from $35/hour to $40/hour on her weekly labor income? Go back to assuming her original hours worked (30 hours each week). Treat this part separately from part a.
Suppose that in a competitive output market, firms hire labor from a competitive labor market (so that the profit maximization conditions for hiring labor are as we discussed in class). If the supply of this kind of labor decreases, we would expect which of the following regarding the equilibrium wage, W, and the equilibrium quantity of labor, L, employed? Group of answer choices a) a decrease in W and a decrease L b) a decrease in W and a decrease L c) an increase in W and a decrease L d) a decrease in W and no change in L e) increase in W and an increase in L
Suppose demand for labor is given by the equation P = 75 – 20 and the supply for labor is given by the equation P = 15 + 4Q. Price is the hourly wage rate in dollars and quantity measures the number of workers. Imposing a minimum wage of $70 will result in O None of the above. O Unemployment of 0 and firms will hire 15 O Labor shortage of 0 and firms will hire 10 O Labor surplus of 15 and firms will hire 20 workers
Suppose the supply of soccer players is give by the the equation Ls=W/10 and the valu of the marginal product is given by VMPL=100,000 - 100LD. Question 1 Compute the equilibrium number of players hired in a competitive labor market. Round to the nearest whole number. Question 2 Compute the equilibrium the wage paid to each player in a competitive labor market. Round to the nearest dollar.