Problem 4: Price Interventions Suppose that, in the absence of government intervention, the supply and demand schedules for PA graduates is as follows: Quantity of Jobs Offered to PA majors (demand for PA labor) 2000 Salary Quantity of PA majors willing to work (supply their labor) $45,000 $40,000 $35,000 $30,000 $25,000 4000 3500 2500 3000 3000 2500 3500 2000 4000 a) Sketch the labor market for public affairs majors and indicate the equilibrium salary and quantity of jobs. b) Suppose that the government instituted a minimum starting salary for all college graduates, including public affairs majors, of $40,000. On your graph, indicate the impact of this minimum salary on the market for public affairs majors. Be sure to indicate the new quantity of jobs offered/supplied and the amount of any surplus (a.k.a. unemployment) or shortage of PA major labor.

Economics 4. Assume men and women are perfect substitutes. Across employers there is a distribution of the discrimination coefficient against women of -0.2 to 0.5. In a graph with female employment on the x-axis and the gender wage ratio on the y-axis answer the following. a. What would be the "y-intercept" of the Demand curve? b. Assume female labor supply is perfectly inelastic. Show on this graph equilibrium where women and men are paid equally. c. A bizarre disease starts leading to more women being born then men. How will this eventually affect the gender wage gap if there are no simultaneous demand shocks?

(b) Identify the profit-maximizing wage rate that Molly's Motorcycles will pay its mechanics. Explain using the labeling on the graph.

true or false? The entrance of more workers into a particular labor market is likely to drive down the wage in that market