Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 4, Problem 15P
To determine
The effect of minimum wage on the unskilled labor market.
Concepts Introduced Wage Floor - It is the minimum wage or wage bracket established by law. It is the floor below which the prices are not allowed to fall in an industry or sector.
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Table 28-4 The following data is about the labor
market in the city of Productionville. Wage
(Dollars per hour) Quantity Demanded (Units)
Quantity Supplied (Units) 8 6,000 16,000 7
9,000 14,000 6 12,000 12,000 5 15,000 10,000
4 18,000 8,000 Refer to Table 28-4. If the local
government imposed a minimum wage of $7 in
Productionville, how many people would be
unemployed? Group of answer choices 0 2,000
5,000 10,000
This question involves the labor market for bakers in New York.
Suppose that the bakeries all sell bread in a competitive labor market for $2/loaf and the MPL and labor supply are described by
these equations:
MPL = 3 –L where L is the number of hours of labor
= 2w where w is the wage per hour
Ls
Find the $ value of the MPL (VMPL) function and then the equilibrium wage and amount of labor hired.
What is the equilibrium wage? $_
/hour
Wage Rate
(dollars per hour) (millions of hours)
Quantity Supplied Quantity Demanded
(millions of hours)
30
60
50
40
40
50
4
30
60
3
20
Refer to the below table. What
70
is the level of unemployment in millions of hours if the minimum wage is set at $3
per hour?
1) 70
2) 40
3) 30
4) 20
5) Zero
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