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Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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
Transcribed Image Text:WAGE (Dollars per hour)
20
18
Wage
16
Supply
14
12
10
8
6
4
2
0
0
Demand
90 180 270 360 450 540 630 720 810 900
LABOR (Hundreds of workers)
Market for Labor in the Fast Food Industry
(Dollars per hour)
Labor Demanded
(Hundreds of
workers)
6
900
Labor Supplied
(Hundreds of
workers)
378
In this market, the equilibrium wage is S
per hour, and the equilibrium quantity of labor is
Suppose the mayor of Combopolis introduces a legal minimum wage of $6 per hour. This type of price control is called a
hundred workers.
For each of the wages listed in the following table, determine the quantity of labor demanded, the quantity of labor supplied, and the direction of
pressure exerted on wages in the absence of any price controls.
Wage
Labor Demanded
Labor Supplied
(Dollars per hour) (Hundreds of workers) (Hundreds of workers)
8
12
Pressure on Wages
True or False: A minimum wage below $10 per hour is not a binding minimum wage in this labor market.
True
False
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